With less than a handful of days left in 2016, it's time for us to look ahead and consider what might be in store for real estate in the New Year.
Clearly, with a new president only a few weeks away from being sworn in, there are bound to be changes from the world we've gotten used to in recent years.
Exactly what those changes will be, and their impact on the real estate market, remains to be seen. What I think we can already see, however, is that financial markets have reacted positively since the election, with a rally in stock markets that is still ongoing and having a knock-on effect of helping to raise mortgage interest rates.
While some will point to the problems that higher rates may present to some buyers, I think it's wise to take a wide-angle view and realize that rates are actually increasing as a direct result of more confidence in the American economy.
At the end of the day house purchases are driven by the confidence that buyers have, not only in terms of their own job security, but also in the general feel good factor in the economy.
Let's also not forget that mortgage rates had arguably been artificially low for some considerable time, unable to make their often anticipated move north as a result of a wide variety of factors, both at home and abroad. Now that long expected increase has happened and can rightly be seen as a market correction, rather than any specific warning sign for the real estate industry. And as I mentioned in last week's review of 2016, rates are still relatively low on any historic scale.
What also gives me cause for confidence heading into the New Year are some of the expert predictions that are being made at the moment. Corelogic, for example, is predicting homeowners' net worth will rise by 5.2% in 2017, which is good news for equity, which has been growing at an excellent rate in recent years.
The National Association of REALTORS® has said that it expects even more millennials will be buying places of their own in 2017. It also expects that the buying power of many millennials will surprise the market. As ever, a buoyant entry level sector will have a positive domino effect right through to the top of the housing chain. Yet more cause to be optimistic.
Rentals have been on the rise again this year and there's little doubt we'll see more of the same over the next 12 months. The dream of owning a home is as strong as ever and, for those who can afford to break the rental cycle, arguably more attractive than ever.
There are bound to be bumps in the road ahead, of course, but I think there are some really good signs that we're going to see great things during 2017.
Why not call us to discuss your real estate related plans for the New Year. We're always here and able to provide any advice you may need.
Wishing you and your family a very happy and prosperous 2017.