RISMedia
  • News
  • Premier
  • Reports
  • Events
  • Power Broker
  • Newsmakers
  • More
    • Publications
    • Education
No Result
View All Result
  • Agents
  • Brokers
  • Teams
  • Marketing
  • Coaching
  • Technology
  • More
    • Headliners New
    • Luxury
    • Best Practices
    • Consumer
    • National
    • Our Editors
Join Premier
Sign In
RISMedia
  • News
  • Premier
  • Reports
  • Events
  • Power Broker
  • Newsmakers
  • More
    • Publications
    • Education
No Result
View All Result
RISMedia
No Result
View All Result

2017 Forecast: Housing to Downshift as Election Realities Set In

Home Latest News
December 1, 2016
Reading Time: 3 mins read
2017 Forecast: Housing to Downshift as Election Realities Set In

Snail on Staircase

Housing is expected to downshift next year as the post-election economy sets in, driven by a deceleration in home price growth, according to realtor.com®’s recently released 2017 housing forecast. The forecast projects home prices nationally growing at a rate of 3.9 percent, down from 2016’s 4.9 percent estimate, and an appreciation slowdown of 1 percent or more in nearly half of the U.S.’ top 100 metropolitan areas.

“Multiple factors are coming together,” says realtor.com Chief Economist Jonathan Smoke. “One is a continued trend toward moderation—basically the effect of seeing all of the rebounds coming off of the distress, the foreclosure years finally well behind us, so there’s no longer that dead cat bounce that was occurring in some markets. Second…we’re now in record price territory in many places in the country, so that’s starting to have its own moderating effect. We’re seeing that evident in the fact that more markets in our forecast represent a deceleration in price trend as opposed to an acceleration in price trend.”

The Lakeland-Winter Haven, Fla. area tops the list of 46 markets projected to experience an appreciation slowdown in 2017, followed by Durham-Chapel Hill, N.C. and Jackson, Miss.

Mortgage rates, which last week treaded above 4 percent for the first time this year, are projected to reach 4.5 percent, according to the forecast. The Federal Reserve is widely expected to raise the key interest rate in December.

“A new wrinkle is the higher mortgage rates,” Smoke says. “They have an impact on the potential of the buying pool in high-cost areas in that they really start to challenge qualifications from an affordability perspective, so, as a result, they tend to have a dampening effect. Our forecast would imply that we’re expecting, in addition the December move, likely two to three more moves next year.”

Higher mortgage rates do, however, have the potential to result in less stringent enforcement action, which, coupled with changes per the Trump Administration, could open up credit opportunities closed off to otherwise qualified homebuyers.

“What I’m expecting is that those trends toward more conservatism will likely improve simply because mortgage rates are higher,” says Smoke. “An even more important factor is the fact that the refi market goes away when mortgage rates are above 4 percent; if want to keep their lending operation performing similarly, then they have to turn to the purchase market more. I think the consumer’s going to win in that perspective.”

Leading positive price movement—though lessened compared to 2016—will be the Phoenix-Mesa-Scottsdale, Ariz. area, ranked the No. 1 housing market of 2017 in the forecast. The area is projected to see prices grow 5.94 percent and sales grow 7.24 percent. Los Angeles-Long Beach-Anaheim, Calif., Boston-Cambridge-Newton, Mass.-N.H., Sacramento-Roseville-Arden-Arcade, Calif., and Riverside-San Bernardino-Ontario, Calif. round out the top five of the forecast’s ranking.

Realtor.com’s 2017 Housing Forecast – Top 100 Metros

realtorcom_2017_top_metros

Twenty-six of the top 100 metropolitan areas, as well, are projected to experience appreciation of 1 percent or more, including the Greensboro-High Point, N.C., Akron, Ohio, and Baltimore-Columbia-Townson, Md. areas.

The forecast projects the homeownership rate to stabilize at 63.5 percent after hitting a 50-year low point (62.9 percent) in the second quarter of 2016. The homeownership rate rallied to the 63.5 percent-mark in the third quarter.

Existing- and new-home sales, additionally, are projected to grow 1.9 percent (to 5.46 million) and 10 percent, respectively, while new-home construction starts are projected to grow 3 percent.

“We are forecasting marginally better inventory as a result of new construction continuing to expand,” Smoke says. “It’s not going to materially change the supply dynamic. New construction is ultimately the safety valve for pressure from a supply/demand standpoint, so continued growth there starts to alleviate price pressure—the release has to come from market.”

Demographic activity overall will have a substantial impact on housing in 2017, as well. The forecast projects baby boomers and millennials will power demand over the next decade, with millennials comprising 33 percent of homebuyers and boomers, 30 percent next year. Concentrations of these groups are in many of the top markets ranked in the forecast; millennials, however, are also projected to make waves in Midwestern cities, including Madison, Wis., Columbus, Ohio, and Omaha, Neb., where they currently hold 42 percent marketshare.

For more information, please visit www.realtor.com.

For the latest real estate news and trends, bookmark RISMedia.com.

Tags: Housing ForecastJonathan SmokeMortgage RatesPhoenixrealtor.com®
ShareTweetShare

Related Posts

FHFA Director Compares Potential Cuts to GSEs to DOGE
Industry News

FHFA Director Compares Potential Cuts to GSEs to DOGE

May 19, 2025
ERA Key Realty’s Team Blue Is Breaking Records in Boston
Industry News

ERA Key Realty’s Team Blue Is Breaking Records in Boston

May 19, 2025
PropStream to Exhibit at ‘Property Challenge Live’ in Atlanta June 6-7
Industry News

PropStream to Exhibit at ‘Property Challenge Live’ in Atlanta June 6-7

May 19, 2025
Buffini & Company Launches AI Bootcamp Led by Industry Icon Michael Thorne
Agents

Buffini & Company Launches AI Bootcamp Led by Industry Icon Michael Thorne

May 19, 2025
Louisiana
Industry News

Louisiana Legislation Would Change Buyer Agreement Requirements

May 19, 2025
Williams
Economy

New York Fed President Says Housing Affordability ‘Number One Issue’ for Economy

May 19, 2025

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Tip of the Day

Don’t Get Greedy as a Team Leader

Too often, team leaders make the mistake of taking 50% of their agent's self-gen business. Here's what you should do instead. Watch now.

Business Tip of the Day provided by

Recent Posts

  • FHFA Director Compares Potential Cuts to GSEs to DOGE
  • ERA Key Realty’s Team Blue Is Breaking Records in Boston
  • PropStream to Exhibit at ‘Property Challenge Live’ in Atlanta June 6-7

Categories

  • Spotlights
  • Best Practices
  • Advice
  • Marketing
  • Technology
  • Social Media

The Most Important Real Estate News & Events

Click below to receive the latest real estate news and events directly to your inbox.

Sign Up
By signing up, you agree to our TOS and Privacy Policy.

About Blog Our Products Our Team Contact Advertise/Sponsor Media Kit Email Whitelist Terms & Policies ACE Marketing Technologies LLC

© 2025 RISMedia. All Rights Reserved. Design by Real Estate Webmasters.

No Result
View All Result
  • Home
  • Premier
  • Reports
  • News
    • Agents
    • Brokers
    • Teams
    • Consumer
    • Marketing
    • Coaching
    • Technology
    • Headliners New
    • Luxury
    • Best Practices
    • National
    • Our Editors
  • Publications
    • Real Estate Magazine
    • Past Issues
    • Custom Covers
  • Events
    • Upcoming Events
    • Podcasts
    • Event Coverage
  • Education
    • Get Licensed
    • REALTOR® Courses
    • Continuing Education
    • Luxury Designation
    • Real Estate Tools
  • Newsmakers
    • 2025 Newsmakers
    • 2024 Newsmakers
    • 2023 Newsmakers
    • 2022 Newsmakers
    • 2021 Newsmakers
    • 2020 Newsmakers
    • 2019 Newsmakers
  • Power Broker
    • 2025 Power Broker
    • 2024 Power Broker
    • 2023 Power Broker
    • 2022 Power Broker
    • 2021 Power Broker
    • 2020 Power Broker
    • 2019 Power Broker
  • Join Premier
  • Sign In

© 2025 RISMedia. All Rights Reserved. Design by Real Estate Webmasters.

X