Thanks to affordable interest rates and easily available credit, it looks like the 2017 housing market will be a healthy one, with more new homes being built this year. The price of a home should increase slightly this year, but only by around 5.3 percent; and new homes are expected to sell for a median price of around $192,500.
In spite of slightly higher mortgage rates, analysts are predicting that floods of millennials and baby boomers will be buying new homes this year, especially in certain areas of the country where houses continue to be a bargain. Likewise, more baby boomers will be putting their homes on the market, so there should be an increase of family-sized homes available for sale as well.
Whether you’re looking for homes for sale or are planning to build, here are five trends you can expect to see in the coming year.
Higher Mortgage Rates
One of the biggest changes home buyers will see this year is higher mortgage rates, which have slowly started to climb. Rates are still lower, however, than they were a few years ago. Currently, the fixed-rate interest on a mortgage is around 4.1 percent, which is just slightly up from last year’s rate of 3.5 percent. The good news though, is that mortgage rates are slated to increase by only two percent until 2019.
Millennials Will Flood the New Housing Market
According to the National Association of Realtors, more millennials than ever before are expected to become first-time home buyers in 2017. These younger buyers, however, will be migrating to medium-sized cities where housing is more affordable.
According to Forbes, medium-sized cities such as Raleigh, North Carolina, and Fort Collins, Colorado tend to have more affordable housing markets, and these are attracting millennials from all over the country. Analysts also predict a large migration to the Midwest, which boasts the cheapest housing prices in the nation. Cities that are particularly attractive to bargain-hunting millennials include Madison, Wisconsin; Omaha, Nebraska; Des Moines, Iowa; Columbus, Ohio and Minneapolis, Minnesota.
More Baby Boomers Will Enter the Market
More baby boomers are expected to buy homes this year, either because these empty nesters want something smaller and more compact, or because they want to move to their retirement destination. In recent years, this demographic has been more cautious about moving from the family home, largely because of the nationwide housing bust. Thanks to healthier housing prices in 2017, analysts predict that baby boomers will take full advantage of the fact that they’ll be able to get a bigger price now for the family home that they’re vacating.
More People Will Be Selling Their Homes
With more baby boomers putting the family home up for sale, buyers can expect to see a good choice of family-sized houses on the market this year. A good place to search for these homes — as well as brand new homes just entering the market — is ClassifiedAds.com, which features thousands of homes for sale in cities across the country. With free ad posting and potential ad exposure to thousands of people nationwide, ClassifiedAds.com has become a popular housing marketplace for buyers, sellers and renters.
Big City Living Will Become Less Affordable
While wages are predicted to rise in some big city markets this year, the increase won’t be enough to make homes more affordable in these areas. To help mitigate the problem, some suburban downtown areas are focusing on the development of more-affordable, smaller-sized homes built near urban centers and public transit stations. This is exemplified in the “surban” housing movement (a merge of urban and suburban) now utilized in several high-priced areas of California.
While 2017 will be a year of changes in the housing market, analysts agree that most of the changes will be subtle. Likewise, many of these changes actually reflect a healthy housing market — and most of them will even be beneficial to the home buyer.