With another year of ups and downs logged in the books, many have made predictions detailing what 2017 has in store for the housing market. In what position did 2016 leave us? Notable to last year:
- Mortgage rates dipped below 4.0% early in the year, only to catapult beyond 4.0% following the presidential election.
- A larger number of millennials jumped onboard with the home buying process.
- The country saw a decrease in the unemployment rate, coupled with an increase in earnings.
- Low housing inventory remained a concern, especially in first-time homebuyer markets.
How 2017 Will Play Out, According to Experts
Though decelerating in rate compared with recent years, the 2017 housing market is expected to experience an upward trend in growth. Factors determined to influence this growth trend include:
- Demand for housing steadily on the rise. The Millennial and Boomer generations are slated to take the lead in buyer demographics.
- Slow, but steady, uptick in housing prices. A pricing increase is anticipated thanks to low inventory and modest growth expected in the U.S. economy. Prices, however, are expected to be a full percentage less than that of 2016.
- Increase in sales early on in the year. The threat of rising interest rates will likely catalyze people into buying during the year’s first quarter, a period typically seeing a dip in sales.
What Factors Have Experts Concerned?
The overall consensus seems to be a positive outlook for an upward trend, but there are a few factors that many agree will affect the growth pattern for 2017:
- Volatility in mortgage rates. The Fed has hinted at three rates hikes to be implemented throughout the year.
- Decline in new and existing home sales. Though not expected to drop dramatically, a decline in sales from 2016 is expected, thanks to rising mortgage rates.
- Inventory shortage in lower-priced brackets. Many first-time home buyers may experience difficulty in finding affordable housing.
Wherever we land at the end of 2017, we think it’ll be a year of growth, positive outcomes and potentially even a lesson in patience. For questions or expert assistance with your real estate settlement needs, contact Linear Title & Escrow at (757) 340-0340 today.