Three trends to watch in the 2017 real estate market
Nobody has a crystal ball to know exactly what the future holds for the real estate market. However, an objective look at events in the real estate market often yields valuable insight into what current homeowners and potential homeowners can expect in the real estate market going forward. This piece explores some of the brewing trends that could shape the realities of the U.S. real estate market in 2017.
1. Mortgage rates are rising
Mortgages rates have been building momentum for an ascent since 2016; hence, it is not entirely surprising that the rates have already started rising. It might interest you to know that mortgage rates would have soared this year irrespective of who won the last presidential elections because the U.S. Federal Reserve had already made plans to raise Interest rates.
However, not many people thought that mortgage rates would start rising almost immediately after the victory of Donald Trump in the election. Mortgage rates were somewhere around 3.5% prior to the elections but the rates have been rising steadily at is currently about 4.13%.
Going forward, homeowners with variable mortgage rates can expect to pay more for their cost of home ownership. New homeowners will also expect to pay more for their homes WSJ notes that the increase in rates “boost the cost of owning the typical U.S. home by more than $70 a month, or about $26,000 over the life of a 30-year fixed mortgage.”
However, the increase in mortgage rates could reduce the demand for housing to ultimately reduce the competition among potential homeowners; hence, you might find it much easier to find your dream home in 2017.
2. Contrary to stereotypes, millennials will be buying homes
Millennials are probably the most misunderstood generation in America right now. Economists have sold us the stereotype of the ‘rebel’ millennial who is uninterested in some of the societal norms such as homeownership and traditional 9 to 5 jobs. However, new findings reveal that millennials will be making their presence felt in the U.S. real estate market in 2017.
A recent survey conducted by Realtors.com revealed that 52% of people that will be buying houses in 2017 would be first time homebuyers. Interestingly, 62% of those first time home buyers will surprisingly be under 35 years old – hence, most of the houses sold in 2017 will be going to millennials.
You can avoid the potential hustle for affordable starter homes buy stating your home search in winter before the spring home-buying spree. If you are new to the home-buying process, you should consider reading a great mortgage guide in order to educate yourself about mortgages.
3. Expect home prices to rise steadily in the west
Analysts are expecting home prices to soar nationally in 2016 to beat the increase in home prices from last year. Home prices are expected to increase by 4.9% in 2017 as opposed to the 3.9% increase that was recorded in 2016. However, analyst expects home prices in the west to increase significantly above the national average. Home prices could rise about 5.8% in the west coast in 2017 in contrast to the national average of 4.9%.
The increase in house prices in the west coast is understandable because the west coast has many features that make it desirable for homeowners. To start with, the West coast has significantly low unemployment in relation to other parts of the country. The local economies of cities in the West Coast are booming; hence, the increased the demand for west coast housing inevitably causes home prices in the region to rise.