Higher wages, looser credit, and more buyer demand will encourage builders to construct more houses in 2017. Despite a 5 percent increase in groundbreakings this year, the housing market is still hurting from a lack of available homes.
Fortune named five trends that will shape the housing market in 2017. Mortgage rates will remain historically low, but they will rise from rock-bottom levels last year. Buyers who want affordable homes will migrate to medium-size cities like Raleigh, N.C., and Fort Collins, Colo. An influx of foreign buyers will drive up prices in cities along the coast.
Redfin's Nela Richardson also points out that though rates may rise, mortgage credit will likely be more widely available due to slightly looser lending standards. She points out that the Federal Housing Administration will likely lower fees it charges first-time homebuyers, a continuation of a trend begun in the Obama administration, under which it lowered fees in 2015.