The majority of real estate experts are predicting a strong and prosperous year for the US housing market in 2017 and into the foreseeable future and the value of homes in some markets continue to climb at a speedy rate. In cities like Miami, L.A, San Francisco and San Diego, it’s thought that the housing market was going to experience a crash, which could mean challenging and interesting times for property investors and developers.
Here are some of the biggest predictions and insights for the housing market in 2017.
The biggest factor that will affect the housing market this year is President Donald Trump. The plans of the repatriation of business, investment and jobs back to the US could essentially lead to strong inflation and a high dollar, which will have a domino effect and impact on the price of homes, which means that renters will want to get into the market quickly.
Vice President of Statistical and Economic Modeling Eric Fox has indicated that the top forecast markets to show price appreciation will occur in Seattle, Washington, Portland, Oregon, Denver and Colorado, where the rates range between 10-11%.
Housing Construction On The Rise
It’s predicted that new home construction will not keep up with the housing demand, and over the next decade, a lot of renters will become home owners. Across the nation, housing prices are an average of $50,000 below the pre-recession highs. But as construction rates moderate, hot markets like Miami, San Francisco and the other previously mentioned cities should all massively increase to all-time highs which could have serious implications for a housing market crash.
Mortgage Rate Trends
Mortgage rates are expected to remain at around 4% which is historically low for new homeowners looking to lock in a 30 year mortgage. This is widely being referred to as the Trump Effect as business and home lending becomes more eased and lax. This is predicted to boost the number of home purchases in the next few years. Employment is growing and wages are increasing, which means that the housing market is essentially set for growth.
Some housing market experts foresee a plateau in the housing market in 2020 after strong growth in the next few years. According to experts, the housing market is yet to recover from the housing crash and recession of 2007, and although single family spending is rapidly on the up rise, nobody believes that the conditions for high inflation exist. This clearly points to the fact that the next few years will see healthy growth ahead, with an unfulfilled demand for single, detached homes.
With houses remaining on the market for less than 50 days across the nation, the market is as exuberant as it was in 2006, before the prices began to plummet. This could be a clear indicator that the market is nearing the top. It could be great for first time buyers, but could have serious implications on the future of the market.