2017 is an excellent time for buying a new house and making a move. The United States economy is quickly improving, with the real estate market being the main driving force. However, there are some housing trends you should be aware of before investing in a home, as they can mean the difference between whether or not you sign on the dotted line or wait another year to do so.
Increasing Interest Rates
The most talked about US housing trend for 2017 is the rising interest rates. This results in mortgage rates also increasing which raises some concerns about affordability for prospective homebuyers. Fortunately, the rates are not expected to exceed 4.3% which is still significantly lower than what the nation has seen in the past.
More Prospective Buyers than Houses for Sale
2017 has been a seller’s market all year round and while it’s great for the economy, it’s not so excellent for prospective homebuyers. Since there are more people looking to buy a home than there are homes for sale, the competition is steep. This raises the risk of finding yourself in a bidding war which can quickly cause an affordable home to become out of your reach. So, have a pre-approval letter from a lender and come up with a strategy with your real estate agent to entice sellers to accept your offer.
New Homes Being Built
New housing developments will continue to rise throughout 2017. Since there aren’t enough homes for sale to reach the supply demands of potential buyers, construction companies have been working hard to bring balance to the market. As such, you’ll continue to see new homes and subdivisions being built well into next year.
Rise in Income Properties
Yet another US housing trend that is likely the direct result of 2017 being a seller’s market is the increase in people purchasing property for investment purposes. With the prices of homes increasing, people are choosing to continue renting until the real estate market turns in their favor. As such, property owners are currently receiving high ROI on their rental properties.
Increase in Credit Availability
This US housing trend is more of a popular prediction than it is an imminent action but the nation continues to have its fingers crossed. With the change in government, there’s a good chance that banks will be more willing to lend to prospective buyers in an effort to reduce the effects the financial crisis has on the country. This would mean that credit would be easier to achieve but at higher interest rates, as mentioned previously.
Millennials in the Market
For those Americans buying real estate in 2017, more than half of them are under the age of 36, as per Zillow. As a result, otherwise unpopular areas in the nation are expected to become more popular due to their starter homes being more affordable.
Homeowners Aren’t Moving
As a result of the US housing trends mentioned previously, many current homeowners are choosing to remain in their current home. With a locked in mortgage below 4%, homeowners are refraining from selling and upgrading to a new home in an effort to avoid higher interest rates and unaffordable housing. As a result, the seller’s market continues.
To sum it up, buying a house in 2017 will serve as a bit of a challenge. If you can afford the high market prices and increased interest rates, you’ll be up against other homebuyers eager to obtain a house in this seller’s market. However, if you do buy a house, you have the option to receive a high ROI if you decide to rent it out or sell in the future. It’s quite unpredictable but the real estate market always is.