While the year unfolds and we watch as a number of potential economic policies from a new administration are signed into order, more insight into 2017’s housing market begins to unfold. Last month we talked about housing appreciation and interest rates. Now, experts are weighing on new trends for the new year.
Redfin is expecting 2017 to break the 2016 record as the fastest market on record, measured by the average number of days homes spend on the market before going under contract. In 2016 the typical house stayed on the market for just 52 days, about a week faster than in 2015 and the fastest year since Redfin began tracking in 2009. Redfin is also predicting 2017 to be even faster— data taken from demand for short-notice tours of homes for sale, including same day tours, and the number of home tours completed, which has grown 19 percent. Redfin also recognizes a new approach for many buyers, one that seeks an efficient transaction.
In 2016, Millennials showed no signs of their ability to influence the housing market. Now in the new year, experts are predicting that millennials and boomers will greatly move markets, the two largest American generations in history. Chief Economist Jonathan Smoke cited on realtor.com predicts that millennials alone will make up 33% of buyers in 2017 as they approach life stages that typically motivate people to buy homes: marriage, children, job security.
Fannie Mae and Freddie Mac have begun to back bigger mortgages for the first time since 2006, a major sign of recovery from the past housing crisis. This will make it easier for more homebuyers to qualify for a mortgage in higher-priced markets. While the new administration has alluded to many changes in the structure of Fannie and Freddie, we don’t imagine that happening until 2018, as Redfin reminds us of a lengthy and political process to repeal that charter. We also expect increases in the availability of low downpayment mortgages from big lenders. These larger institutions introduced mortgages requiring as little as 1-3% down, drawing more millennial buyers into the housing market.
All signs point a great 2017 for the housing market, with much buyer demand and new inventory.