The past year hasn’t been the best year for real estate but it has yet managed to chug along while pushing the economy. However, the home trends in 2017 has some real positive signs for the real estate market, which is definitely going to witness a lot more home selling and buying. Housing has contributed to only 15% of the GDP because lending standard has been pretty strict and the builders, having just survived a crisis, were reluctant to go for higher investments.
However, the good news is that the latest home trends are showing signs of changes and within the next few months business is going to really peak. Here are some of the trends that will shape the real estate market in 2017:
- Increasing Rates
After 2006, it was the second time in a decade that the Federal Reserve increased its rates and if experts are to be believed, there are going to be more increments in 2017. There will certainly be a direct impact on mortgage rates, which are going to rise making it even more a steeper climb for the prospective homebuyers. Buying the dream home will get difficult but it should not be too much a cause of concern. The mortgage rates are going to rise but it won’t cross the 4.3% on 30 year fixed rate. Now, this is quite a convenient deal if we are to take a look at the history of such rises.
- Higher credit
It is being predicted that even though the rates are going to increase but availability of mortgage credit is going to be wider because of the less strict lending standards. The Federal Housing Administration might even look at lowering its fees for the first time buyers, something that we all witnessed in 2015. Home buying is going to get a boost as Freddie Mac and Fannie Mae (mortgage companies owned by the government) will provide backing to the bigger mortgages, which in turn will make it even more convenient for the homebuyers.
- Greater Number of New Homes
The latest home trends point to the fact that home builders are going to build more new homes in 2017. This is being primarily driven by factors like looser credit, higher wages and greater demand in home buying.
- Foreign buyers are here to stay
Real estate prices are rising in larger cities like Los Angeles or New York because of the increase in the number of foreign buyers. Of late the number of foreign buyers in the US has largely increased and this has made home buying unaffordable for the common folks. These foreigners are here to stay and will keep on influencing the real estate market like never before.
- Expansion of the smaller cities
The larger cities are unable to meet the demand for new construction because of the strict regulations of the local governments and or geographic constraints. Younger people are flocking the medium-sized or smaller cities that offer better housing affordability.