Will Home Prices Continue to Rise in 2017?
The State of the 2017 U.S. Housing Market
In many areas around the country home prices have been steadily rising. It’s been a welcome change for homeowners who want to sell their home, a great source of revenue for builders and a point of frustration for many people seeking to buy a home.
However, will this trend continue? 2017 will see a number of changes, including a changing political climate in the U.S. What impact will it have on you as a builder? Here’s what you need to know.
Housing Prices Should Continue to Go Up, But At a Slower Rate
Many experts expect housing prices in the country to continue growing, albeit at a slower pace than in past years.
Realtor.com predicts that there will be a slowdown in the growth of home prices, from 4.9% growth in 2016, to an estimated 3.9% growth in 2017. Zillow estimates a drop to 3.6%, compared to it’s 2016 value of 4.8% growth.
This is good news for buyers trying to afford a home, and it’s also good news for your business. Housing prices are still going up and demand is still there.
How the Mortgage Rate Increase Will Impact Home Builders
You also have rising interest rates to consider when assessing how 2017 could look for your residential home building business. In October 2016, the Fed finally raised the interest rates on 30-year fixed rate mortgages.
The rates jumped dramatically, moving from 3.47% up to 4.3%, and many consumers worried that it would make purchasing a home more financially difficult.
However, the International Times article linked to earlier in this post explains the impact this will have in positive terms, stating, “So in the grand scheme of things, the rise in mortgages may be a bit over-hyped.”
And despite the increases, rates are still below pre-recession numbers.
Will the Mortgage Rate Increase Impact Buyer Demand?
As a builder, you might be concerned about the impact rising mortgage rates and housing prices will have on buyer demand.
There’s good news here, too — demand for homes isn’t likely to decrease this year. You should always do your homework before starting a new project, but all signs point to a strong housing market and strong demand.
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