Residential Real Estate Forecast
The 2017 national real estate market is predicted to moderately slow moderately as compared to the last two years, according to Realtor.com®. Home prices are anticipated to slow to a 4 percent increase, down from 5 percent in 2016, and interest rates are expected to reach 4.5 percent in the year ahead.
Home Sale Growth Just Over the Horizon
Realtor.com® is forecasting the home-ownership rate will stabilize and new home sales are expected to grow 10 percent, while new home starts are expected to increase 3 percent. The forecast is based on GDP growth of 2.1 percent, a 2.5 percent increase in the customer price index and unemployment declining to 4.7 percent by the end of the year.
Baby Boomers Expected to Drive Housing Boom
Millennials and Baby Boomers will dominate the housing market in 2017. Baby Boomers will make up 30 percent of home buyers, and with their financial positions, they are less likely to have problems finding and closing on a home. Due to mortgage rate increases over the last few weeks, Realtor.com® predicts first time buyers will face difficulties. Higher rates will make qualifying for a mortgage and finding affordable inventory more challenging, particularly for Millennials, a group that will make up 33 percent of the buying market. Jonathan Smoke, Chief Economist for Realtor.com® says,
With more than 95 percent of first-time home buyers reporting one or more financial challenges, the uptick we've already seen may price some first-timers out of the market.
Despite an expected moderate housing market overall in 2017, Raleigh is named #8 in the Realtor.com® Top 10 Housing Markets.
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