The Home Buying Institute recently released their top 5 forecasts and predictions for the 2017 US real estate and home buying market. The consensus is that the housing market and real estate will endure a ‘cooling’ period. Meaning growth, but at a slower rate than in the previous year:
“Cooling” seems to be the key word for 2017. Many analysts and economists expect the residential real estate market to cool down over the next 12 months, in terms of both competition and home-price appreciation.
They go on to predict that home values will increase between 3 and 5 percent in the next year with the red hot California housing market cooling off significantly:
Housing markets across California are undergoing a shift. It’s not a buyer’s market yet, but it’s not the strong seller’s market of years past either. Home prices are leveling off in many major metros.
For example, Zillow recently issued a housing market forecast for San Francisco, which was one of the hottest real estate markets 18 months ago. By their estimation, home prices in the city will actually drop a bit over the next 12 months.
“San Francisco home values have gone up 0.6% over the past year and Zillow predicts they will fall -0.4% within the next year,” the company said in October 2016. This is a market that has peaked, plain and simple.
In the mortgage rate department they predict that rates will continue their gradual rise, but not exceed 5 percent:
This housing market forecast comes from the Mortgage Bankers Association (MBA), which recently predicted a slight rise in mortgage rates through the end of this year. The MBA expects the average rate for a 30-year home loan to reach 3.7% by the end of 2016, and to continue rising gradually throughout 2017.