2016 was a fairly good year for the housing industry. Despite builders not producing enough homes, national prices crossed the previous 2006 peak, mortgage rates remained historically low, and the Millennial generation finally began to enter the market. The effects the recent election will have on the market are yet to be determined, but that doesn’t stop folks from attempting to predict what might happen.
Below are five things housing experts predict seeing in 2017, according to Forbes Magazine.
Price increases will slow down
Prices rose every month for the first 10 months of 2016 with the largest gains in the second half of the year and a 5.6% national increase. Despite a slowing sales growth, homebuyer demand is stronger now than it was at this time last year and there is a slightly higher number of homes for sale. Consumer confidence numbers are high and the unemployment rate is low, Redfin—a web based real estate brokerage firm—expects the median home sale prices to increase 5.3% in 2017 compared to 2016. Zillow’s forecast is a bit lower, but still positive, at a 3.2% increase.
Mortgages will be easier to obtain
The Trump administration has made it apparent that they intend to roll back much of the post-crisis financial regulation laid out in the Dodd-Frank Act. There is also speculation that Trump will return private control to currently government-controlled mortgage companies Fannie Mae and Freddie Mac. This could open up banks to lend more freely to a wide-range of potential buyers.
There will be an increase in supply
Declining inventory was the defining feature of the housing market in 2016. This led to price appreciation and a hyper fast market for buyers. It also discouraged would-be-sellers who feared entering the buying fray. But there are some indications that 2017 could see a small bump in the housing supply.
Homebuilder’s expect Trump to be a friend to the industry, so construction plans picked up late in 2016 with the election of Trump. A strong demand for new homes should also encourage building.
There will be an uptick of Millennial homeowners
According to Zillow, half of all buyers are under the age of 36, so millennials (adults born after 1980) should continue to make up a large and growing portion of the buyer pool, as they are now the largest adult generation and they make up the greatest percentage of the workforce Much of this is because Millennials (adults born after 1980). Redfin expects Millennial homebuyers will move from the coasts to inland markets where starter homes are more affordable.
Competition for buyers will increase
In 2017, sellers will continue to have the edge over buyers as demand increases. In 2016, the typical home stayed on the market just 52 days, the fastest year since 2009. Redfin expects 2017 to be even faster.
So, if you’re thinking of buying a home: start looking. 2017 just might be your year.