Are you wanting to buy a home in 2017? Rumors have been swirling about what we can expect to see from the housing market over the next 8 months. We’re digging into those rumors so you can know what we will and won’t run into for the remainder of 2016.
High prices. In 2016, housing prices, on average, rose every month including here in Middle Tennessee. While home sales are predicted to continue to rise in 2017, they should do so at a slower pace. When it comes to housing prices, we shouldn’t expect to see them dip again until mortgage interest rates rise sharply, which shouldn’t happen during this calendar year.
Sellers’ market. The battle still remains clearly in the court of the seller because of rising prices and low inventory in many areas. But don’t let this scare you away from buying a home; low interest rates will still make 2017 a great time to be a buyer.
Bidding wars. We will continue to see multiple offers on homes, especially those under $600,000. Cash offers will win many of these wars, but a solid down payment along with lender pre-approval will also secure your offer in many cases.
Slowly-rising interest rates. While interest rates are still favorable, they have risen relatively quickly in 2017. According to bankrate.com, the average 30-year fixed-rate mortgage is 3.83% this week. To give some perspective, these are some of the highest rates we’ve seen since 2014. Mortgage rates are predicted to continue to climb but will stay in the 4% range. If slightly higher interest rates are scary to you as a potential buyer, buy down the interest rate on the front end of the loan.
Short supply. Homes will continue to be in short supply, but not nearly the low inventory we saw in 2016. However if interest rates continue to rise, we may see a greater shortage; homeowners who bought or refinanced at the lowest of rates are unlikely to sell their homes because they want to stick with their current rock-bottom rate.
Buyers leaving the market. As prices and interest rates increase, many buyers may find themselves unable to compete for homes. While we saw increased prices and higher interest rates about 10 years ago, banks were willing to do some creative financing to keep buyers in the game. Thankfully due to today’s more stringent borrowing requirements, we won’t find ourselves in another financial crisis that brought down the housing market.
Millennial buyers. If you’re looking for houses on the lower-priced side of the market, expect to have some competition from Millennial buyers who are beginning to transition from renting to buying homes for the first time ever.
No matter your financial situation in 2017, it’s crucial to work with an experienced agent Contact one of our agents at Exit Realty Bob Lamb & Associates who can help you to navigate through whatever you may encounter as a buyer!