Redfin predicts that in 2017, Millennials will move to smaller major cities, new construction growth will slow, and mortgage rates will rise only slightly
The share of for-sale homes that are considered affordable has been decreasing over the last few years, and that is expected to slow housing market growth next year.
Rising house prices and mortgage rates will make it tough for first-timers to buy and will encourage existing homeowners to stay put. But, even with affordability issues, the median home sale price is projected to rise 5.3 percent year-over-year in 2017.
Redfin offered seven predictions for the housing market next year. The company’s chief economist, Nela Richardson, writes that homes will be sold faster and buyers will spend less time searching for homes. Mortgage rates will rise, but not too dramatically (no higher than 4.3 percent on the 30-year fixed rate), and more potential buyers will have access to home loans.
New construction growth will slow to six percent, according to Redfin, which will limit the availability and push up the price of starter homes.
Homebuying Millennials are expected to buy homes in smaller major cities.
Forty-one percent of first-time buyers surveyed by Redfin chose design quality, floor plan and finishing touches as the top features they look for in a home. ... In order to get the high-end finishes and design styles they want, they’ll have to buy in more affordable cities like Raleigh, North Carolina, Austin, Texas, and North Port, Florida, which lead the country in the number of new residential building permits per 1,000 people.