According to Nela Richardson, Chief Economist of Redfin, a typical house stayed on the market for 52 days in 2016—that’s the shortest time documented since Redfin’s 2009 records, and 2017 is expected to beat this as the fastest market on record. With newly advanced technology and a steady rise in demand throughout the country, experts predict that next year’s housing market will enliven homebuyers in nearly every state. Let’s take a closer look at next year’s forecast.
- Homes will spend less time on the market: In Redfin’s latest report, Richardson highlights that “the next generation of real estate technology will see a shift in innovation from online listings to hardware and real-world services that increase the efficiency of real estate transactions.” This means that potential homebuyers can expect quick and easy access to an online offer, which will significantly expedite the home buying process.
- The housing market will continue to grow, but slowly: In the past four years, the percentage of affordable homes in the nation’s largest cities, based on median income, has continuously declined. Although affordability pressure is expected to slightly grow throughout the next year, existing home sales are predicted to increase by 2.8 percent. In addition, housing inventory will begin to recover, increasing 1.7 percent within upcoming months.
- Construction growth will slow: According to a Redfin study, nearly one in four construction workers is foreign-born. This means that with stricter immigration policies, construction labor shortages may slow new construction-growth to a mere 6 percent in 2017.
- Mortgage rates may increase, but not by much: Yes, mortgage rates may climb in 2017—but not to unaffordable levels. In fact, Wall Street has recently expressed great optimism that next year’s economic growth and levels of inflation will keep mortgage rates low.
- Home loans will be accessible to more people: This year, large financial institutions introduced mortgages requiring down payments of as little as 3 percent. In addition to continuing this trend throughout 2017, we can expect an increase in home loan accessibility to more people.
- Millennial homebuyers will move to second-tier areas: As we recently discussed in the article “Suburbs are Surpassing Cities in Growth,” many millennial and first-time homebuyers have moved to suburban areas to find lower cost housing alternatives—and 2017 will be no different.
Overall, 2017 is shaping up to be a great year for the housing market. For more information about home financing, please contact one of our mortgage specialists today.
Topics:
mortgage news,
housing market
