30.11.2016 06:01:00
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Realtor.com® Forecasts Post-Election Economy to Result in Higher Mortgage Rates While Housing Delivers Slower Gains in 2017
SANTA CLARA, Calif., Nov. 30, 2016 /PRNewswire/ -- The 2017 housing market will be a year of slowing, yet moderate growth, set against the backdrop of a changing composition of home buyers and a post-election interest rate jump that could potentially price some first-timers out of the market, according to the realtor.com® 2017 housing forecast released today.
The report also predicts the top five housing trends of 2017, as well as home prices and sales for the 100 largest metros in the U.S. Realtor.com® is a leading online real estate destination operated by News Corp [NASDAQ: NWS, NWSA]; [ASX: NWS, NWSLV] subsidiary Move, Inc.
2017 national housing forecast
The 2017 national real estate market is predicted to slow compared to the last two years, across the majority of economic indicators. Home prices are anticipated to increase 3.9 percent and existing home sales are forecasted to increase 1.9 percent to 5.46 million homes. Interest rates are expected to reach 4.5 percent due to higher expectations for inflationary pressure in the year ahead.
Realtor.com® is forecasting the homeownership rate will stabilize at 63.5 percent after bottoming at 62.9 percent in 2016. 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 consumer price index and unemployment declining to 4.7 percent by the end of the year.
Prior to this month's election, demographics and an improving economy were laying the foundation for a substantial increase in first-time buyers in 2017, but due to mortgage rate increases over the last few weeks realtor.com® predicts first timers will face new hurdles as they navigate the qualification and buying process. These higher rates are associated with anticipation of stronger economic and wage growth next year, both of which favor buyers. However, higher rates will make qualifying for a mortgage and finding affordable inventory more challenging.
"We don't expect the outcome of the election to have a direct impact on the health of the housing market or economy as we close out 2016. However, the 40 basis points increase in rates in the days following the election has caused us to increase our interest rate prediction for next year," said Jonathan Smoke, chief economist for realtor.com®. "With more than 95 percent of first-time home buyers dependent on financing their home purchase, and a majority of first-time buyers reporting one or more financial challenges, the uptick we've already seen may price some first-timers out of the market."
Top Housing Trends for 2017
Next year's predicted slowing price and sales growth, increasing interest rates and changing buyer demographics are setting the stage for five key housing trends:
Top 2017 housing markets
Despite a more moderate housing market overall in 2017, strong local economies and population growth will continue to fuel the nation's top markets. The realtor.com® 2017 top 10 housing markets based on price and sales gains are: 1. Phoenix-Mesa-Scottsdale, Ariz.; 2. Los Angeles-Long Beach-Anaheim, Calif.; 3. Boston-Cambridge-Newton, Mass.-N.H.; 4. Sacramento--Roseville--Arden-Arcade, Calif.; 5. Riverside-San Bernardino-Ontario, Calif.; 6. Jacksonville, Fla.; 7. Orlando-Kissimmee-Sanford, Fla.; 8. Raleigh, N.C.; 9. Tucson, Ariz.; and 10. Portland-Vancouver-Hillsboro, Ore.-Wash.
These top 10 markets are forecast to see average price gains of 5.8 percent and sales growth of 6.3 percent, exceeding next year's anticipated national growth of 3.9 percent and 1.9 percent, respectively. But when compared to last year, prices in eight of the top 10 markets are expected to decelerate with only Los Angeles and Tucson, Ariz. showing stronger growth than last year. Other commonalities among the top 10 housing markets include: relatively affordable rental prices, low unemployment, large populations of millennials and baby boomers, as well as a high number of listing views on realtor.com®. See Table 1 for the ranking of the top 100 largest metros in the U.S., as well as their price and sales forecasts.
Table 1: Realtor.com®'s 2017 Housing Forecast – Top 100 Metros
Rank | MSA | Price | Sales | Rank | MSA | Price | Sales |
1. | 5.9% | 7.2% | 51. | Greensboro-High Point, N.C. | 5.5% | 3.6% | |
2. | 6.9% | 6.0% | 52. | Scranton--Wilkes-Barre--Hazleton, Pa. | 2.4% | 6.6% | |
3. | 6.1% | 6.3% | 53. | Tulsa, Okla. | 4.9% | 4.0% | |
4. | 7.2% | 4.9% | 54. | Augusta-Richmond County, Ga.-S.C. | 4.3% | 4.6% | |
5. | 5.0% | 6.9% | 55. | Spokane-Spokane Valley, Wash. | 4.8% | 4.0% | |
6. | 4.8% | 7.0% | 56. | Indianapolis-Carmel-Anderson, Ind. | 3.7% | 5.0% | |
7. | 5.7% | 6.1% | 57. | McAllen-Edinburg-Mission, Texas | 3.6% | 5.1% | |
8. | 4.2% | 7.6% | 58. | Greenville-Anderson-Mauldin, S.C. | 5.0% | 3.6% | |
9. | 6.1% | 5.5% | 59. | Philadelphia-Camden-Wilmington, Pa.-N.J.-Del.-Md. | 5.5% | 3.1% | |
10. | 6.6% | 5.0% | 60. | Atlanta-Sandy Springs-Roswell, Ga. | 5.9% | 2.7% | |
11. | Durham-Chapel Hill, N.C. | 2.6% | 9.0% | 61. | Birmingham-Hoover, Ala. | 4.2% | 4.3% |
12. | Colorado Springs, Colo. | 4.8% | 6.7% | 62. | Washington-Arlington-Alexandria, D.C.-Va.-Md.-W.Va. | 3.9% | 4.6% |
13. | Jackson, Miss. | 2.0% | 9.4% | 63. | Worcester, Mass.-Conn. | 3.5% | 5.0% |
14. | Detroit-Warren-Dearborn, Mich. | 5.2% | 6.2% | 64. | Baton Rouge, La. | 2.9% | 5.5% |
15. | San Diego-Carlsbad, Calif. | 6.5% | 4.9% | 65. | Omaha-Council Bluffs, Neb,-Iowa | 3.7% | 4.6% |
16. | Salt Lake City, Utah | 6.7% | 4.7% | 66. | Cape Coral-Fort Myers, Fla. | 2.9% | 5.4% |
17. | Deltona-Daytona Beach-Ormond Beach, Fla. | 3.1% | 8.2% | 67. | Urban Honolulu, Hawaii | 4.6% | 3.8% |
18. | Provo-Orem, Utah | 5.2% | 5.8% | 68. | Oklahoma City, Okla. | 4.1% | 4.2% |
19. | Austin-Round Rock, Texas | 3.5% | 7.4% | 69. | Cleveland-Elyria, Ohio | 3.6% | 4.7% |
20. | Seattle-Tacoma-Bellevue, Wash. | 7.4% | 3.4% | 70. | Virginia Beach-Norfolk-Newport News, Va.-N.C. | 4.4% | 3.8% |
21. | Charlotte-Concord-Gastonia, N.C.-S.C. | 4.3% | 6.3% | 71. | Miami-Fort Lauderdale-West Palm Beach, Fla. | 4.0% | 4.2% |
22. | Oxnard-Thousand Oaks-Ventura, Calif. | 5.2% | 5.4% | 72. | Memphis, Tenn.-Miss.-Ark. | 3.8% | 4.2% |
23. | New York-Newark-Jersey City, NY-N.J.-Pa. | 4.0% | 6.5% | 73. | Harrisburg-Carlisle, Pa. | 4.9% | 3.1% |
24. | Providence-Warwick, R.I.-Mass. | 6.3% | 4.1% | 74. | Palm Bay-Melbourne-Titusville, Fla. | 4.8% | 3.1% |
25. | North Port-Sarasota-Bradenton, Fla. | 5.0% | 5.4% | 75. | Ogden-Clearfield, Utah | 3.9% | 4.0% |
26. | Denver-Aurora-Lakewood, Colo. | 6.4% | 4.0% | 76. | Louisville/Jefferson County, K.-Ind. | 3.2% | 4.7% |
27. | Pittsburgh, Pa. | 4.1% | 6.1% | 77. | St. Louis, Mo.-Ill. | 3.5% | 4.4% |
28. | Stockton-Lodi, Calif. | 6.1% | 4.0% | 78. | Albuquerque, N.M. | 3.6% | 4.1% |
29. | Houston-The Woodlands-Sugar Land, Texas | 4.0% | 6.1% | 79. | Richmond, Va. | 5.2% | 2.6% |
30. | Boise City, Idaho | 4.8% | 5.3% | 80. | Winston-Salem, N.C. | 2.7% | 5.1% |
31. | Tampa-St. Petersburg-Clearwater, Fla. | 4.8% | 5.1% | 81. | Minneapolis-St. Paul-Bloomington, Minn.-Wis. | 4.1% | 3.6% |
32. | Grand Rapids-Wyoming, Mich. | 5.8% | 4.2% | 82. | Des Moines-West Des Moines, Iowa | 2.9% | 4.3% |
33. | New Orleans-Metairie, La. | 4.0% | 5.9% | 83. | Kansas City, Mo.-Kan. | 4.4% | 2.7% |
34. | Springfield, Mass. | 4.7% | 5.1% | 84. | New Haven-Milford, Conn. | 4.4% | 2.6% |
35. | Bakersfield, Calif. | 5.3% | 4.5% | 85. | Columbia, S.C. | 3.4% | 3.6% |
36. | Las Vegas-Henderson-Paradise, Nev. | 5.1% | 4.6% | 86. | Toledo, Ohio | 4.7% | 2.1% |
37. | San Francisco-Oakland-Hayward, Calif. | 8.4% | 1.2% | 87. | El Paso, Texas | 3.9% | 2.9% |
38. | Cincinnati, OH-KY-IN | 3.2% | 6.4% | 88. | Akron, Ohio | 4.8% | 1.9% |
39. | San Jose-Sunnyvale-Santa Clara, Calif. | 8.3% | 1.3% | 89. | Youngstown-Warren-Boardman, Ohio-Pa | 4.8% | 1.9% |
40. | Lakeland-Winter Haven, Fla. | 4.6% | 4.9% | 90. | Little Rock-North Little Rock-Conway, Ark. | 3.0% | 3.6% |
41. | San Antonio-New Braunfels, Texas | 3.3% | 6.2% | 91. | Dayton, Ohio | 4.3% | 2.2% |
42. | Columbus, Ohio | 3.8% | 5.7% | 92. | Wichita, Kan. | 3.9% | 2.5% |
43. | Fresno, Calif. | 3.7% | 5.8% | 93. | Allentown-Bethlehem-Easton, Pa.-N.J. | 3.1% | 3.0% |
44. | Knoxville, Tenn. | 3.1% | 6.3% | 94. | Syracuse, N.Y. | 3.4% | 2.6% |
45. | Rochester, N.Y. | 3.1% | 6.3% | 95. | Baltimore-Columbia-Towson, Md. | 3.0% | 2.9% |
46. | Charleston-North Charleston, S.C. | 3.3% | 6.1% | 96. | Buffalo-Cheektowaga-Niagara Falls, N.Y. | 3.4% | 2.1% |
47. | Nashville-Davidson--Murfreesboro--Franklin, Tenn. | 4.9% | 4.4% | 97. | Albany-Schenectady-Troy, N.Y. | 1.8% | 3.5% |
48. | Dallas-Fort Worth-Arlington, Texas | 4.1% | 5.1% | 98. | Hartford-West Hartford-East Hartford, Conn. | 4.7% | 0.4% |
49. | Milwaukee-Waukesha-West Allis, Wis. | 4.7% | 4.5% | 99. | Bridgeport-Stamford-Norwalk, Conn. | 1.9% | 2.6% |
50. | Madison, Wis. | 3.8% | 5.4% | 100. | Chicago-Naperville-Elgin, Ill.-Ind.-Wis. | 2.0% | 2.3% |
Forward-Looking Statements
This document contains certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's views and assumptions regarding future events and business performance as of the time the statements are made. Actual results may differ materially from these expectations due to changes in global economic, business, competitive market and regulatory and other factors. More detailed information about these and other factors that could affect future results is contained in News Corp's filings with the Securities and Exchange Commission. The "forward-looking statements" included in this document are made only as of the date of this document and we do not have any obligation to publicly update any "forward-looking statements" to reflect subsequent events or circumstances, except as required by law.
About realtor.com®
Realtor.com® is the trusted resource for home buyers, sellers and dreamers, offering the most comprehensive source of for-sale properties, among competing national sites, and the information, tools and professional expertise to help people move confidently through every step of their home journey. It pioneered the world of digital real estate 20 years ago, and today helps make all things home simple, efficient and enjoyable. Realtor.com® is operated by News Corp [NASDAQ: NWS, NWSA] [ASX: NWS, NWSLV] subsidiary Move, Inc. under a perpetual license from the National Association of REALTORS®. For more information, visit realtor.com®.
Media Contact:
Realtor.com®
Lexie Puckett Holbert – lexie.puckett@move.com
Photo - http://photos.prnewswire.com/prnh/20161129/443963-INFO
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/realtorcom-forecasts-post-election-economy-to-result-in-higher-mortgage-rates-while-housing-delivers-slower-gains-in-2017-300370050.html
SOURCE realtor.com
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