The outcome of the 2016 presidential election took many by surprise, and injected both optimism and pessimism into consumers’ expectations about the housing market in the year ahead. Republicans are feeling a surge of confidence about the housing market in 2017 while Democrats turned bearish, according to a research conducted online by Harris Poll on behalf of Trulia,. Millennials also lost some enthusiasm when it comes to homeownership: fewer are saying that it is part of their American Dream, and most renters who are planning on buying a home are telling us they won’t do so until least the end of 2018.
As part of our annual look at the year ahead in housing, we commissioned two surveys of more than 2,000 Americans each about their housing hopes and fears in the year ahead. Rather than our single point-in-time look, we took a step further this year and deployed our annual survey twice, once before (Oct. 26-28) and once after (Nov. 15-17) the election, to find out if a presidential election affects consumers’ sentiments about the year ahead. We noticed some striking trends. Among them:
- Republicans swung from being more pessimistic about the housing market before the election to more optimistic afterwards. Before the election, the percentage point difference between optimistic and pessimistic Republicans was -9 points when it came to buying a home next year. After the election, that changed to +17 points – a massive 26-point swing.
- Democrats swung from being optimists about the housing market before the election to more pessimistic afterwards. Before the election, the percentage-point difference between optimistic and pessimistic Democrats was +13 points when it came to buying a home. After the election, that changed to -10 points – a drop of 23 points.
- Millennials’ dream of homeownership has fallen more than any other age group, falling to 72% this year from 80% last year. Though 83% say they plan on buying a home someday, 72% say they won’t do so until at least the end of 2018.
In addition to the survey, we also put together a short list of predictions for 2017:
- Rising mortgage rates will cool home buying in California and the Northeast, where our Rent vs. Buy margins are slimmest, but won’t have any noticeable impact in the rest of the country.
- House price growth in the Bargain Belt will catch up with the Costly Coasts, especially because homebuyers there are feeling a renewed sense of optimism about the housing market.
- Low inventory will bottom out and may even turn upwards, but homebuyers might not see price relief if President-Elect Trump’s policies boosts demand without boosting supply.
And finally, we’ve identified a list of 10 markets to watch in 2017 based on a healthy combination of affordability, job growth, and online search activity. Half of these markets are in the Florida, and so are the top three: Jacksonville, Cape Coral-Fort Myers, and Deltona-Daytona Beach.