Here are eight housing predictions from the experts:
- Prices will continue to rise, but more slowly. In 2016, prices rose every month up until October. The prediction is that price increases will hold steady because homebuyer demand is stronger than it was at this time last year.
- Affordability will worsen because the share of homes affordable to someone earning the median income is not. This trend will be intensified by a continued shortage of low to moderate priced inventory and rising mortgage rates.
- Mortgage rates will be volatile. By historic standards the rates are still low, but may be rising a bit. For 2017, the Fed’s anticipate there to be three hikes, making it the best time to buy or refinance now.
- Credit availability may improve. The president elect and his team have indicated that they hope to roll back much of the post financial regulation which came about as a result of the Dodd-Frank Act. This act regulates the financial market and rolling it back could open up banks to lend more freely to a wide range of would be buyers.
- Supply will improve, but remain short. Declining inventory was a defining feature of the housing market in 2016. This led to prices increasing rapidly and discouraged some would be sellers from entering the buying fray. There are some signs that the coming year may see a bump in housing supply, at least on the new home front.
- More millennials will become homeowners and renters. According to Zillow, half of all buyers are under the age of 36. Millennials are adults born after 1980 and are not the largest adult generation and make up the greatest percentage of the workforce.
- Competition will grow fiercer. In 2017 sellers will maintain the edge over buyers as demand is expected to increase. In 2016, according to Redfin, the typical homes stayed on the market for just 52 days.
- Political uncertainty will be replaced with policy uncertainty. The president elects pledge to spend more on infrastructure, to cut taxes and to crack down on immigration could impact the housing market. However, opinions vary widely on this.