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How Will Home Values Fare in 2017?

financial-equalization-1015309_960_720The real estate market has been climbing for several years now, and our area – Nashville and its surrounding markets – is especially hot. But what can we expect from 2017 and beyond? How will home values fair for the foreseeable future? We’ve done the research and analyzed the variable to get all the answers for you below.

Interest Rates. At long last, interest rates will start to slowly creep up in 2017 due to the Federal Reserve deciding to raise them. While increasing rates typically do impact the market negatively, the small increases we expect in 2017 aren’t enough to significantly alter home values, especially here in our area. Even as they increase, rates will still remain at historical lows that won’t bring down housing market enthusiasm any time soon.

Builder Optimism. Builders are optimistic about home values and when builders are happy you know the housing market is in good shape. Some estimates show 160,000 new homes being built in 2017 and through the years following. In addition to new builds, an additional 6 to 6.5 million homes are expected to exchange hands during the next 11 months.

Millennials. Millennials, the largest generation in American, will be hitting the housing market for the first time, which will boost housing prices and make the market even hotter. For years they’ve been struggling under student loan debt but with rumors of loan forgiveness after 15 years and other student loan management programs, those with massive amounts of debt may still be able to enter the market soon. They’re expected to comprise roughly 40% of first-time home buyers.

Job Market. The job market is also expected to trend upward over the next two years, adding over 800,000 jobs over that time period. More jobs means more money to put towards home ownership and home values will continue to rise because of it.

Many economists expect that housing prices nationwide will rise by at least 4 percent in 2017, while our area may see even greater growth. Interest rates at still historically low levels will be incentive enough for new home owners to continue to buy, driving up housing prices and further increasing the economy’s overall improvement.

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