Home values and demand for housing continued to pick up in 2016, as many individuals impacted by the Great Recession felt they were finally in a place to buy or sell a home.
Looking forward to next year, here are a few items that may impact the direction of housing in 2017:
- Look to Interest Rates
It’s impossible to predict with certainty where interest rates will go in the upcoming year. There are many factors and economic indicators that can drive interest rates up or down.
Prior to the election and prior to recent increases in rates, there was consensus the economy would pick up in 2017 and lead to higher rates. After the election and in anticipation of future economic growth, rates jumped up quickly and went up higher than expected.
While rates are unlikely to fall back to the rates we experienced before the election, and they could potentially go higher, it may be a good time to get a professional opinion about your home financing situation.
If you’re in the market for a new home or thinking about refinancing, make sure you engage a home financing expert to advise you on your interest rate options and how that affects your home buying affordability.
- Price Demand Will Vary
Regardless of the direction interest rates head in 2017, it’s important to remember that real estate prices are driven by supply and demand. Less supply and increasing demand will mean inventory shortages and increasing prices. More supply coming to the market generally helps to ease prices.
In 2017, this means that price fluctuations will depend on the specific housing market. For many locations across the Western United States, demand will continue to drive prices higher. However, other locations across the country may see prices softening.
An increase in rates may have a short-term impact on demand, but changes in pricing will depend more on location than rates.
- The Pacific Northwest Will Stay Hot
Price and demand in the purchase market is forecasted to increase in the Pacific Northwest region. The Seattle and Portland regional markets are some of the hottest in the country and they consistently outpace national value appreciation numbers.
With few changes in the overall demand picture, it’s clear this trend will most likely continue into 2017.
The best way to get a handle on the latest in your local real estate market is to connect with trusted real estate professionals. At Evergreen Home Loans, our associates are standing by to assist you with all your questions and to guide you to a home loan solution that meets your personal homeownership goals. Find your local branch office!