We're more than halfway through 2017! That means it's time to reflect on national housing market predictions from the beginning of the year and look ahead to what we can expect for the remainder of the year. As a reminder, in early 2017, experts anticipated price growth would slow, inventory would bottom, and mortgage rates would climb.
According to Forbes, here are five things we can look out for:
1. Continued low inventory. Low inventory has been synonymous with our local market for a while, so this quote from one expert probably hits close to home for many people in the Seattle area: "I think we are OK calling it a straight up inventory crisis at this point." According to an analysis, the current number of homes for sale is about equal to the housing supply in 1994 even though the U.S. population has grown by 63 million people since then.
2. More demand and higher prices. To follow the last point, since supply cannot fulfill demand, national home prices were up 5.58 percent through May. The current administration's policies that could boost demand and millennial home buyers mean demand is not expected to dissipate anytime soon.
3. Lack of affordable housing. While the median value of homes in the U.S. is a relatively affordable $200,000, the median home sold for $263,800 in June. These prices are different (i.e. significantly lower) than what we typically see in our local market, but it is also common for us to see homes sell way over list price.
4. Homes will move fast. This is the effect of low inventory and high demand. The good news is there are still homes for sale. The not so good news is they go quickly. Nationally, the share of homes still on the market two months after listing is 47 percent. Again, these numbers are different for our region but the phenomenon of homes being snatched up quickly is the same.
5. Low mortgage rates. Here's some good news! The average rate of the 30-year fixed mortgage is below the roughly 4 percent rate seen at the start of the year and at the low end of the range of economists' forecast for the end of the year. We owe this to investor confidence in the U.S. government.
Contact us with questions about how we can help you better understand and navigate our ever-changing housing market!