5 Predictions for 2017 Housing Market
The real estate market tends to slow down this time of the year with cold weather setting in and holiday travels on the horizon. This is a good opportunity to evaluate the state of the market and make predictions for 2017.
Refinances will decrease
After a long road to recovery, refinancing is on the decline. Because of record-low rates, most borrowers who qualify for refinancing have done so already. The drop in refinances opens the avenue to encourage new purchases.
New home sales will increase
Buyers want “new” homes. Existing home sales are down and new home construction has been on the rise. Despite rising rates, the Mortgage Bankers Association forecasts that 2017 will be a strong purchase year.
First-time buyers will enter the market
Millennials are reaching the financial stability to qualify for home loans and seeking home ownership.
Higher rates are likely
Rates have hovered record lows throughout most of 2016, and only recently started to rise significantly after the election. The Federal Reserve is expected to raise interest rates after its December meeting. However, when it costs more to borrow, home prices will start to come down.
Inventory will rise
Construction spending is shifting from multifamily to single family homes. This year’s housing market stress was partially due to shrinking inventory. With construction picking up, the market will balance.
Overall 2016 brought positive numbers for the housing market. We expect this momentum to carry on into 2017.
Sources: World Property Journal, Rob Chrisman, CNBC, HousingWire, MarketWatch