A Look at the 2017 Housing Market
Posted January 31st, 2017 by Clarissa Gregg

Housing forecasts are appearing and real estate professionals are curiously watching the market trends. Of course, trying to anticipate what the real estate market will do is a task that can confound even the most seasoned experts. While keeping in mind that no one has a “crystal ball,” these here are a few things we anticipate could happen this year.

Heated housing market. Predictions from the National Association of Realtors, the Mortgage Bankers Association, Fannie Mae and Freddie Mac show that home sales are going to heat up in 2017, according to a blog by NAR. “NAR is predicting existing-home sales to reach 6 million in 2017, higher than its 5.8 million forecast for this year. But other entities are even more bullish. MBA is predicting home sales to eclipse 6.5 million next year, while Fannie Mae and Freddie Mac are both predicting 6.2 million.”*
Another support for the housing sector is the U.S. economy, which continues to see modest growth. Unemployment in November fell to 4.6 percent, its lowest level in more than a decade. Wage growth, which has been stagnant for years, has also ticked up this year.***

A new wave of buyers will be entering the market. Millennials, America’s largest generation, are also starting to enter the housing market and in 2017 will make up roughly 40 percent of first-time home buyers.***

Mortgage rates will continue to rise. Mortgage rates reached a two-year high in 2016. This has caused buyers to act now before rates further increase or to change what they are searching for. In a Redfin survey quoted in the National Association of Realtors it was stated that “23 percent of those surveyed say the rate increases may prompt them to look in other areas or buy a smaller home. About 26 percent of buyers say they might take more time with their search and see if rates go back down again.”**

Mortgage Limits Rise for 2017. Having higher loan limits are a bit of good news given challenges borrowers face with interest rates and home price appreciation continuing to head up. The average commitment rate on a 30-year, fixed-rate loan was 4.30 percent the week of Dec. 22, an increase of almost 100 basis points since the middle of 2016, according to Freddie Mac data.

* National Association of Realtors RealtorMag – Predictions Roll in: 2017 Housing Forecasts – October 4 2016 http://realtormag.realtor.org/daily-news/2016/10/03/predictions-roll-in-2017-housing-forecasts#sf37742278
** National Association of Realtors RealtorMag – Survey: Higher Rates Don’t Scare Buyers DAILY REAL ESTATE NEWS | WEDNESDAY, DECEMBER 28, 2016 HTTP://REALTORMAG.REALTOR.ORG/DAILY-NEWS/2016/12/28/SURVEY-HIGHER-RATES-DONT-SCARE-BUYERS
National Association of Realtors RealtorMag – Higher Loan Limits Coming in ’17 – DECEMBER 29, 2016 http://realtormag.realtor.org/daily-news/2016/12/29/higher-loan-limits-coming-in-17
*** CBSnews.com – Moneywatch – How will U.S. home prices fare in 2017? December 6, 2016 http://www.cbsnews.com/news/how-will-u-s-home-prices-fare-in-2017/

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