The level of housing confidence today can influence economic consumption, and supply & demand for residential real estate tomorrow. This is why it is essential to measure and monitor housing confidence.
In any real estate market, aspirations for future homeownership among today’s renters are key indicators of housing confidence. The Homeownership Aspirations Index (HAI)–one component of the Zillow Housing Confidence Index–quantifies these critical ingredients of overall real estate market sentiment. Although the composite Renter HAI is almost flat over the past year, in certain metro areas, the Renter HAI has changed quite a bit. The most significant positive and negative changes in renter aspirations have occurred in Los Angeles and Boston, respectively.
What a Difference a Year Makes
Given the stakeholder attitudes that they directly reflect, these index shifts may portend divergence in home sales volume, rent prices, and real estate values in these cities. The below chart reveals data collected in The U.S. Housing Confidence Survey that have driven the past year’s Renter HAI changes for Boston and L.A.