Page 26 - Scene Magazine 42-02 February 2017
P. 26

Real Estate Scene
Realtors® Housing Expectations for 2017
Another strong year for the hous- ing market has come to an end and the calendar has turned over to 2017, it is time to examine the hous-
ing outlook and expectations for the new year.
Existing-home sales are forecast to muster only a small gain in 2017 be- cause of increasing mortgage rates and shrinking consumer confidence that now is a good time to buy a home, ac- cording to new consumer survey find- ings and a 2017 housing forecast from the National Association of Realtors® (NAR).
NAR’s Housing Opportunities and Market Experience (HOME) sur- vey, which asked respondents about their confidence in the U.S. economy
and housing expectations for 2017, recently found that 68 percent of home- owners think now is a good time to make a home purchase compared to 82 percent in December 2015.
Even with this dip in buyer enthusi- asm, the market did well and existing sales closed 2016 3.3 percent higher than 2015 and reached around 5.42 mil- lion – the highest since 2006 when sales totaled 6.47 million.
In 2017, sales are forecast to grow roughly two percent to around 5.52 million. The national median exist- ing-home price rose to around five percent in 2016 and is expected to rise to about four percent in 2017. By the end of next year, mortgage rates are expected to reach around 4.6 percent.
Existing-home sales are expected to see little expansion in 2017 because of affordability tensions from rising mort- gage rates and home prices continuing
to outpace income growth. Ultimately, the market needs to see a growth in for sale inventory, otherwise the nation’s low homeownership rate will struggle to rise in 2017.
Here are a few of the trends and pre- dictions the Battle Creek Area Associa- tion of Realtors® expects to see play out in the new year.
Tight inventory conditions will continue. Recent data from NAR show that the supply of existing homes for sale is insufficient, and new home construction is not meeting demand. More buyers are competing for a few- er number of affordable homes than a year ago, which will likely continue in 2017.
Increasing home prices. With de- mand rising and listings scarce in many markets, NAR forecasts home prices will increase nationally about four per- cent in 2017. In cities with the tightest of supply, prices could expand above double digits.
Rising mortgage rates. The recent rise in mortgage rates will likely con- tinue in 2017 with additional increases. With inventory tight and prices already rising far above incomes in some areas along with the unwelcoming sign of higher borrowing costs only adds to the difficult barrier of entry for many pro- spective buyers.
Waning consumer confidence. De- clining affordability in many parts of the country has been weakening con- sumer morale. Rents and home prices outpacing incomes and scarce supply in the affordable price range will continue as a prominent headwind for many pro- spective buyers this year.
Buying a home can sometimes be a challenging process, but with a little work and a Realtor® - a member of the National Association of Realtors® - at your side, 2017 may be a good time to start looking.
Contact the Battle Creek Area Asso- ciation of Realtors® at (269) 962-5193 or visit our website to find a Realtor® for information and ad- vice about buying a home in 2017.
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