The 2017 national real estate market is predicted to slow compared to the last two years, across the majority of economic indicators. Home prices are anticipated to increase 3.9 percent and existing home sales are forecasted to increase 1.9 percent to 5.46 million homes. Interest rates are expected to reach 4.5 percent due to higher expectations for inflationary pressure in the year ahead. Realtor.com® is forecasting the homeownership rate will stabilize at 63.5 percent after bottoming at 62.9 percent in 2016. New home sales are expected to grow 10 percent, while new home starts are expected to increase 3 percent. The forecast is based on GDP growth of 2.1 percent, a 2.5 percent increase in the consumer price index and unemployment declining to 4.7 percent by the end of the year.
The housing market in 2016 was largely defined by two main trends: rising home prices nationwide and falling interest rates due to political events such as the Brexit vote and the U.S. presidential election. And while certain features of the housing market this year are expected to remain the same in 2017, such as the popularity of Western metropolitan areas, others are expected to change. From the rising influence of millennials to shifting trends in home prices and housing inventory, this article provides a look at the top housing market trends for 2017, according to Joe Kirchner, senior economist at Realtor.com.
The Federal Housing Finance Agency (FHFA) announced that Release 1 of the Common Securitization Platform (CSP) was successfully implemented on November 21. This means that Freddie Mac is now using the CSP for Data Acceptance, Issuance Support, and Bond Administration activities related to current single-class, fixed-rate, mortgage-backed securities. The implementation of Release 1 demonstrates that the system, operations, and controls of the CSP and Common Securitization Solutions (CSS), a joint venture owned by Fannie Mae and Freddie Mac (the Enterprises), are functional.
NAHB Economics recently released its 2016 “Priced Out” Estimates showing that, nationally, a $1,000 increase in the median new home price (triggered, for example, by additional regulation) will leave 152,903 households priced out of the market. This means that 152,903 U.S. households could qualify for a mortgage on the median-priced new home before, but not after, the price increases. The number of priced-out households varies across both state and metropolitan areas. The differences are largely driven by the size of the population and the affordability of new homes. Among all the states, California registers the largest priced out effect where a $1,000 new home price increase pushes 15,328 households out of the market, followed by Texas (13,674), and Pennsylvania (9,374).
The tax laws encourage home ownership with a variety of tax breaks, and the largest involves deducting the interest that homeowners pay on mortgages. Right now, there aren't major legal changes on the books that will affect the mortgage deduction in 2017, but the recent results of the presidential election point to a broader shift that could have implications for some homeowners in the future.
The data is in for the newest profile of this year’s first-time homebuyer. MGIC pulled out seven handy facts and created a shareable infographic to describe top traits of the homebuyer group. Single-women increased their share in the market, hitting levels not seen since 2011, according to the National Association of Realtors’ annual Profile of Home Buyers and Sellers survey. While married couples make up the largest share of homebuyers at 66%, and had the highest income at $99,200, single women are increasing their role. Last year the share of single women fell to its lowest point since 2002’s 15%, but this year they seem to be making a comeback. Single women represented 17% of the market this year, the highest point since 2011.