Real Estate Trends For 2017

With the election of any new president, uncertainty looms.  However, while the President-elect built his empire on real estate, he has said relatively little about what policy changes he might make regarding housing.  That’s not too unusual, since when the housing market is doing well it is not much of a topic of conversation.

Here’s are some coming real estate trends into 2017:2017 real estate trends san diego

1. Rising prices will keep homeowner’s equity rising
After a 6.3 percent increase in 2016, home prices are poised to rise another 5.2 percent through September 2017, according to Core Logic. Rising prices have doubled the amount of home equity held by Americans with the average homeowner gaining more than $11,000 in home-equity wealth last year alone. If home prices continue to increase as projected, Americans would add $1 trillion in home equity next year.

2. Rising mortgage rates 
Rates for conventional loans shot up nearly a quarter of a percentage point in the days following the election, the fastest increase since 2013. That could be just the beginning; the Fed is expected to continue raising rates on a strong economy, and even before Trump’s election, the Mortgage Bankers Association predicted rates would reach 4.8 percent (an increase of nearly two percentage points) by the end of 2017. 

That means that homeowners looking to refinance should do so earlier in the year, and buyers should consider locking in their rates during the closing process. While some worry that rising rates could dampen the housing market, job security and wage growth are larger factors on home activity than interest rates.

3. It’s getting easier to get a mortgage
According to the Mortgage Credit Availability Index, it’s easier to get a mortgage now than at any time in the past eight years. That reflects an increased availability of both jumbo loans and low down-payment loans. Banks may also be more willing to work with borrowers over the next few years as they look to make up for a decline in refinancing business when interest rates go up.

4. Rents will continue to level off.
While rents in most large metro areas will continue to increase next year, they’ll grow at just 1.7 percent next year, says Zillow’s rent forecast. The modest gains follow years of double-digit growths in many places and reflect inventory finally catching up with demand as builders create new apartment buildings to accommodate the nearly 40% of Americans renting.

san diego real estate trends for 20175. Less cash buyers
All-cash buyers fell below 30% of home sales this year for the first time since 2007, and they’re projected to decline for the next two years until they get back to their historical average of about 25 percent, says Core Logic. That’s good news for many potential homebuyers, who have struggled to compete with all-cash buyers in bidding wars.

6. Continued low inventory
While builders have increased production, they’re still only putting homes up at about 60% of the normal pace. Core Logic says that total housing inventory at the end of September increased 1.5% to 2.04 million existing homes for sale, but that’s still 7% lower than last year. Unsold inventory in September was at a 4.5% month supply, down from 4.6% the previous month. (A 6 month supply is considered a healthy market.)

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