February 5th, 2017 8:12 AM by Christopher Terry
Every year the housing market changes. In the last decade we have seen very high highs, and very low lows. But it is predicted that the 2017 housing market will even out, creating a steady amount of inventory and demand in the upcoming year. Below are some of the specifics that we can expect in 2017.
We discussed the economy’s effect on interest rates in great depth in a previous post (Click Here to See Post) of ours, but here’s a small recap if you missed it. Immediately after the election results came in, mortgage rates increased. They continued on an upward trend through the end of 2016, and with the Federal Reserve’s December announcement to increase interest rates, we can expect the mortgage rates to continue to rise. Typically, when rates begin to go up, buyers come out earlier in the selling season to try to lock in lower rates, so that is something agents can expect this year.
By 2017, sellers have finally regained enough equity in their homes to feel comfortable putting them on the market, the feeling is that this will mean that there will be more homes on the market than we have seen in recent years. Often, when mortgage rates go up, price appreciation goes down so that the overall cost of buying a home isn’t absurdly high. Therefore we often see that the homeowners who are thinking they will sell in the next few years consider selling sooner rather than later because they don’t want to risk selling their home for less in the future than they can sell it now. Thus, early 2017 could see higher inventory and activity than we usually see in the winter months.
Though the rates are increasing, credit is not as hard to get as it was directly after the recession. The Federal Housing Finance Agency even announced that it will increase lending limits for 2017. The increase of the conforming loan limits is the first time these have changed since 2006. The limit will rise to $424,100 from $417,000. Some lenders are also offering new mortgage programs that call for a modest down payment and don’t require buyers to purchase an FHA loan. Typically, lenders require credit scores of at least 620 to qualify. We’re also seeing more products form municipal housing agencies that assist many first-time buyers. All of this is in addition to Fannie Mae and Freddie Mac programs that allow for as little as a 3% down-payment for first-time home buyers with loan amounts below the conforming threshold.
Overall, there is an optimism surrounding the 2017 housing market predictions, and the hopes are that we will see a thriving market throughout this new year.
Christopher Terry is a licensed real estate broker in Ma and RI, has completed the Accredited Buyer Representative Certification, is a graduate of the Certified Distressed Property Institute, holds the prestigious CDPE designation, is a 4-Time winner of the Master Sales Society's 5/50 Award and is the founder of EZ Home Search Real Estate Inc.