Brooks Beaupain, ASP, GRI | Windermere Real Estate/East, Inc.
Are you wondering how the real estate market will fare this year?
Here's a look at what some top housing experts expect to see in 2017.
Top Housing Market Predictions for 2017
Home Prices Will Rise, But Not As Fast
The general consensus is that the U.S. housing market will be strong in 2017
, albeit with slowing momentum compared to last year.
expects home prices to rise by around 3.6 percent in 2017, while
, a data and analytics company, expects prices to go up by over 5 percent.
As of last November, Zillow and CoreLogic were reporting 6.5 percent and 7.1 percent year-to-year increases in home prices for 2016, respectively.
Interest Rates Will Go Up
Even though the Federal Reserve raised the federal funds rate by .25 percent in December, the average 30-year mortgage rate is still just slightly over 4 percent, which is extremely low by historic standards.
the 30-year mortgage rate to reach around 4.6 percent by the end of 2017.
A rate increase of .50 percent means a borrower pays around $30 more per month in principal and interest for every $100,000 of loan amount.
Getting a Mortgage Will Be Easier
Mortgage loans should become easier to obtain in 2017
due to some lenders using less stringent qualification guidelines. Originations for home purchases are expected to increase by around 10 percent in 2017, according to
the Mortgage Bankers Association
Suburbs and Second-Tier Cities Will Be Hot Spots
Rising home prices are pushing buyers into outlying areas, leading to an
increased demand for properties in second-tier cities and walkable, amenity-rich suburbs.
Those types of areas are expected to see increased residential growth of nearly 80 percent over the next ten years, compared to 15 percent in more urban areas,
according to John Burns Consulting
"First-Time-Buyer" Homes May Be Harder to Find
More millennial home buyers are expected to shop for a first home in 2017, but
they may find a shortage of entry-level housing.
that the number of first-time-buyer homes for sale dropped 12.1 percent in 2016, compared to a 9.1 percent decrease for all residential inventory combined.
The good news is that
they will probably have fewer cash buyers to compete against.
The share of cash buyers dropped to below 30 percent in 2016 for the first time since 2007,
according to CoreLogic
, and could be on its way to a more traditional 25 percent.
Rental Rates Will Rise, But at a Slower Pace
rents to rise by around 1.5 percent nationwide in 2017
, and in general to carry less steam compared to 2016. Some top-tier markets such as Miami, FL and San Jose, CA have actually seen rental rates drop in the last few months. Experts attribute the change to increased multi-family rental supply, along with the new but growing trend of "co-living" that has taken away some heft on the demand side.
It Will Still Be Cheaper to Buy than to Rent In Most Areas
Buying a home will continue to be a better deal than renting
in most markets,
according to Trulia
. The report states that at current home price levels, mortgage rates would have to increase to at least 5.3 percent (or more, depending on location) before buying becomes more expensive than renting - at least for people who put 20 percent down and stay in a home at least seven years.
And, We'll Still Need to Read Between the Lines...
News headlines can be misleading when it comes to the housing market. At times during 2016 we saw articles stating "Home sales are down", implying that the housing market was taking a hit.
In reality, a drop in the number of home sales can mean two very different things:
If homes are lingering on the market and buyers feel comfortable taking their time, then yes, it's a sign that the market may be softening. However, if home prices are rising and/or buyers are competing for listings, this means there is strong demand and what's holding back home sales is probably a lack of supply.
"Hot market" and "cool market" scenarios require very different approaches from both buyers and sellers, which is why
it's important to understand what's really going on behind the headlines.
What the lawyers make us say: The information here is not presented as expert legal or financial advice. Please use your best judgment and consult professionals when necessary.
Recent Market Highlights
U.S. home prices
rose 5.6 percent year-to-year in October, according to a
recent S&P/Case-Shiller report
They rose 7.1 percent year-to-year in November,
according to CoreLogic
, a data and analytics company.
- The national average
30-year fixed mortgage rate
is slightly over 4 percent.
November Pending Home Sales Index
dropped .4 percent year-to-year, according to the
National Association of Realtors
Housing statistics based on closed sales typically reflect market conditions of two or three months ago.
To find out what's going on right now in your local market, please contact me directly.
Contact Me for Market Information
Are you curious about your home's current market value, or do you have a question about home buying? Just reply to this email, or call me at 206-778-4663.
Links that Make Life Easier
Sometimes real estate-related, sometimes not... these are assorted links that come in handy:
Simple Accounting Business Planner
If the thought of QuickBooks makes you want to lie down and take a nap, these easy-to-use Excel templates for business accounting might be a great alternative. (There's also an inexpensive Personal Budget version.)
Infogram Infographic Maker
An easy way to create professional-looking infographics and interactive charts for websites and presentations.
Touchdown Pizza Recipe
Just in time for the Super Bowl, here's a great-tasting and somewhat different appetizer. (Quick tip: Buffalo wing sauce is different from regular hot sauce.)
The Lighter Side
Photo courtesy of
Proving that heroes come in all shapes and sizes,
nine-year-old Mauco Abeiro charmed hearts worldwide when he found an injured street dog
near his home in Argentina
and offered his favorite toy for sale on Facebook to raise money for a trip to the vet
or on the image to read what happened.
It's a great story to start the New Year off with!
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Your Resource for Real Estate
Are you thinking of buying or selling a home in the next year, or could you use some remodeling advice? Even if you just need the name of a good service provider, please remember that I'm always here to help you.
I welcome the opportunity to serve you, your friends and associates with my expertise and recommendations.
Please give me a call today at 206-778-4663 if I can be of assistance!
Brooks Beaupain, REALTOR®, ASP, GRI
Windermere Real Estate/East, Inc.
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