Since the markets crashed nearly a decade ago, the housing market has seen a peak in 2016, with the low interest rates, high home prices and the highest recorded new home sales since 2008. It’s easy to be optimistic for real estate’s future in 2017. However, with a new president in office for the first time in 8 years in January, things in the market could be shifted yet again. We’ve put together a list of trends predicted for real estate in 2017 to help you enter the next year with confidence, whether you’re looking to buy or sell.
1. Rich in equity
Thanks to a more than 6% increase in home prices over the past year, homeowners have nearly doubled their equity. The average home-owning American gained more than $11,000 in home equity wealth in 2016. With the prediction of another 5.2% increase in home prices through September 2017, homeowner’s equity is set to continue increasing in the coming year.
2. Easier to receive a mortgage
If you need a mortgage, get it now! With an increased availability in both large loans and low down payment loans, mortgages haven’t been this easy to receive for eight years. Banks have also been more willing to work with borrowers and will continue to do so over the next few years since less homeowners are refinancing thanks to high interest rates. But jump on these low interest rates quickly because it’s hard to predict exactly how long they’ll last.
Since the market was just beginning to recover in the few years before 2016, a low inventory of homes was a key theme in the real estate market. Forbes predicts a rise in home construction in 2017 since home prices are set to continue increasing along with a rising demand. And though it will take more than a year to fill the gap between supply and demand, 2017 will be the year of the housing development’s return.
4. Honey, I shrunk our home!
Maybe it’s thanks to the rising demand for city-living or maybe due to the “tiny home” trend, whatever the cause, the median square footage in new homes fell this year- the first time since the recession. With home prices continuing to rise, buyers will keep downsizing in order to find a house they can comfortably afford.
5. Millennial as first-time buyers
As the largest generation living currently, millennials seem to be everywhere, and they’re finally beginning to make their presence known in real estate. Members of this generation are now settling down in their careers, making them better qualified for mortgages, and they’re looking toward starting families and owning their own homes. According to a buyer survey, more than half the homes bought in the next year will be purchased by first-time buyers, most of whom are millennials. Furthermore, in 2017, the market will continue becoming more first-time-buyer-friendly thanks to low interest rates on loans and increasing mortgage accessibility.