According to the realtor.com® 2017 National Housing Forecast next year’s national real estate market is predicted to be slower then 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® forecasted the homeownership rate stabilizing 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.
When asked about 2017 housing predictions, realtor.com® Chief Economist Jonathan Smoke said,
“We don’t expect the outcome of the election to have a direct impact on the health of the housing market or economy as we close out 2016. However, the 40 basis points increase in rates in the days following the election has caused us to increase our interest rate prediction for next year. [Furthermore] with more than 95 percent of first-time home buyers dependent on financing their home purchase, and a majority of first-time buyers reporting one or more financial challenges, the uptick we’ve already seen may price some first-timers out of the market.”
The 2017 National Housing Forecast also predicts the top 5 housing trends for 2017, check out our infographic below! To read the full report visit the realtor.com website.