The forecast paints a relatively optimistic picture as home-value growth and the positive equity that comes with it is expected to empower many cost-burdened homeowners to sell their homes in a favorable market, rather than face involuntary foreclosure.
These experts also reaffirmed expectations that the extreme seller’s market that deepened during the pandemic is back on the gradual path to a more balanced environment.
“The silver lining for aspiring homeowners is that the worst of the housing supply crunch looks to finally be behind us, and most experts believe that the past year’s rapid price boil has begun to simmer down,” Terry Loebs, founder of the firm that conducted the survey, said in Zillow’s report.
As part of the survey, Loebs’ firm Pulsenomics asked 111 real estate experts and economists for their thoughts on the state of the market.
Respondents said they expect housing inventory in the coming months will be primarily driven by existing homeowners moving to another house. This group is expected to account for 40 percent of supply over the next year.
Homebuilders were expected to produce the second-biggest group of homes, at 23 percent of inventory, the survey said.
About 10 percent of the coming supply was expected to come from sellers who plan to rent or otherwise avoid buying again for now.
Foreclosed properties were expected to account for 5 percent of home inventory in the coming year, according to the experts surveyed — the smallest share of any single group.
Approximately 850,000 buyers could exit forbearance programs before November, with no federal foreclosure moratorium in place. However, market conditions remain better than they were during the 2008 housing crisis, when distressed homeowners had less equity in their homes, and conditions were less favorable for sellers, Zillow said.
The foreclosure moratorium and another federal ban on evictions both ended in July. The Centers for Disease Control and Prevention tried to revive an amended version of the ban, but this effort was quickly shot down by the U.S. Supreme Court, leaving separate protections for struggling renters and homeowners in place in some states, but not others.
Still, the experts in the survey did not anticipate the expiring eviction ban to have an outsized impact on the rental market as a whole.
More than half of expert panelists expected rent prices to continue to rise despite the end of the eviction ban. Approximately 34 percent said they expected no change in rent prices. Only 1 in 7 expected rents to fall.
Zillow’s own internal projections estimate that eviction levels could end up roughly 50 percent higher than normal for a while while the market adjusts. Approximately 0.6 percent of renters — an estimated 268,000 — would actually be evicted in the near future under these assumptions, according to the listings company’s research team.