On average, Greater Bostonians aren’t as confident as the average U.S. resident when it comes to diving into local housing markets, a new Zillow report found.
Overall, the Zillow Housing Confidence Index among Greater Boston residents is 63.4, which is just below the national average of 63.7. “In other words,” Cory Hopkins of Zillow said in an email, “residents of Greater Boston are a bit less confident in the local housing market than residents nationwide, and less confident than residents in 11 of the 20 large metro areas analyzed.”
Only 8 percent of current Boston-area residents surveyed said they want to buy a home within a year – 2 percent below the national average.
According to Zillow, in order to meet the demand of potential buyers, housing inventory will have to be added. In January, inventory in the Boston metro area was down about 11 percent year-over-year. This lack of available housing in the Boston Metro market could be one of the reasons residents are a little undecided.
Nationwide, Zillow found that if all renters who say they want to buy a home within 12 months actually did, there would be more than 4.2 million first-time home sales, about double the amount of home-buyers in 2013. However, inventory levels have fallen over the last year in eight of the country’s 20 largest metros.
On top of that, Zillow notes, US Census Bureau data shows in increase in the number of multi-family rental homes being built, rather than homes that would be within the price range of a first-time buyer. And national mortgage rates are also on the rise.
“For the housing market to continue its recovery, it is critical that homes are both available and remain affordable to meet the strong demand these survey results are predicting, particularly from first-time homebuyers,” said Zillow Chief Economist Dr. Stan Humphries in a statement. “[Homeownership aspirations] must also contend with the current reality, and in many areas, conditions remain difficult for buyers. The market is moving toward more balance between buyers and sellers, but it is a slow and uneven process.”
Have a look below at the full housing confidence report. Note: the index is measured on a 0-100 scale, with anything above 50 “indicating positive sentiment.”
Creative Commons Image via Flickr/Willem van Bergen