Housing in 2017: The Good, The Bad, and the Notable
Mortgage company Freddie Mac called 2016 “housing’s best year in a decade”. While your experience may have varied by your location, it’s encouraging to see that overall last year brought in the highest home sales since 2007 and the fastest rate of construction growth sine 2008. The recession is beginning to feel like a faint memory, with metro areas seeing economic growth.
But is 2017 going to continue this trend? Is it a year to be cautious or finally take that investment plunge? Let’s take a look at the forecast for some answers.
1. Credit Risk Will Stay Low
Purchasing a property is a major decision for multiple reasons – one of them being the impact on your credit. Buyers can be nervous about how their purchase might effect the score they’ve worked so hard to maintain. Luckily Core Logic’s Housing Credit Index shows that 2017 should continue to be favorable for these credit risks.
2. Renting Will Become More Affordable
Increased supply has grown to meet rental demand, meaning investors are finding enough renters and can afford to lower prices. This is in part due to more people finding roommates to double up with and can also be attributed to the creation of more multifamily rental units. The renting game is evolving with the times, and it is benefiting both parties.
1. Mortgage Rates are Going To Rise
As the housing market recovers from the crash, mortgage prices are going to raise rise. While this might be a good thing if you are selling, it could mean buyers are more hesitant to purchase and slow the speed of sales we’ve seen in 2016. And time is running out if you are looking to buy. It doesn’t look like inventory is improving either as it’s currently down 11 percent and isn’t likely to get better.
2. Price Appreciation Will Slow
Unfortunately for long time owners, it’s going to be a down year for home price appreciation. While in 2016 growth was at 4.9 percent, 2017 is predicted to see only a 3.9 increase. This shouldn’t scare anyone too much because we don’t know what future years will bring, but is still disappointing.
The Notable (Neutral):
1. Millennials Are Headed to the Midwest
Times are changing, and CBS news predicts that instead of making moves to the coasts, college graduates are going to settle in the Midwest. These locations offer good jobs and more affordable housing options. Madison, Wisconsin; Columbus Ohio, and Minneapolis, Minnesota are a few cities to watch for this trend.
2. Suburbs Will Grow in Popularity
Those who aren’t renting are looking at the suburbs for affordable housing. This means that people driving to work will increase for the first time in a decade because many flocking to the suburbs live in the city. Despite the increased commute time, people in 2017 are going to find the sacrifice worth it for the cheaper prices.
No matter how true these predictions turn out to be 2017 is bound to be a year of a change. Whether you buying or selling, it’s more important than ever to make sure you are working with a property manager who has your best interests at heart. Doing so will ensure 2017 is your best year yet.