Predicting the Housing Market for 2017 and Beyond

While home sales in 2016 remain solid, continued inventory shortages and huge price gains in many metro areas have worked together to stifle the sales growth expected during a period of historically low interest rates. Although this doesn't appear likely to change before the end of this year, experts are predicting that these issues will be somewhat alleviated for 2017, buoying that year's forecast. In fact, four different sources have each concluded that 2017 will have an even higher sales total than the already strong numbers seen in 2016!

No one can predict the future perfectly, but let's hope that four different groups can't all be wrong about the general trend! The National Association of Realtors, The Mortgage Bankers’ Association, Freddie Mac, and Fannie Mae are each expecting total single family home sales to increase in 2017 compared to their 2016 predictions! The MBA was the most bullish on both the totals and the increase, with their 2017 total (6.5 million) 0.3 million higher than their 2016 total (6.2 million). Fannie Mae shows a similar increase of about 0.3 million homes, but expects the 2017 total to be a more moderate 6.2 million. The NAR expects a 0.2 million increase to 6 million total, while Freddie Mac predicted the smallest gain of 0.1 million to 6.2 million overall.

What are the driving forces behind these expected gains for 2017? For one thing, millennial buyers will continue to represent a major growth segment for the housing market as more and more enter adulthood and begin their search for a permanent residence. Another factor working in favor of higher sales is the slow and steady increase in new home construction, which should help moderate the inventory issues seen in markets across the country. In fact, new home construction is expected to rise to almost 1.6 million per year by 2020 before leveling off around 1.5 million per year through 2024.

As they occur over the same time span, the two factors above should provide sufficient fuel to sustain home sales growth through at least 2020, especially considering the lack of any real timetable for significant increases in mortgage rates.

If you would like to learn more about predicting the housing market for 2017 and beyond, check out the source article "US Housing Market Forecast – Strong 2017 to 2020".