As slow as recovery has been since the real estate bubble, things are looking up in 2017. These 5 trends are going to reshape the real estate market this year for the better. Take a look.
1. Interest rates
Interest rates are slowly rising again but don’t worry too much about this upward trend, it’s not expected to go “higher than 4.3% on the 30-year fixed rate” according to Redfin Chief Economist Nela Richardson. This rate is still a great deal compared to historical norms!
2. More credit
There is a trend towards looser lending standards which will make credit more readily available to home buyers in 2017. The Federal Housing Administration will likely lower fees it charges first-time homebuyers. On top of that, government-owned mortgage companies will begin backing larger mortgages for the first time in over a decade.
3. More new homes
Increased demand, looser credit, and higher wages are encouraging home builders to continue the increase on new construction into 2017. The 5% increase in the annual rate of new groundbreakings seen in 2016 was also an encouraging sign.
4. Continued rise of medium sized cities
Although big cities see the largest increases in real estate demand and population growth, the supply has a hard time keeping up with the demand and younger professionals are finding themselves attracted to medium sized cities. These cities can offer the urban lifestyle and plenty of professional opportunities while also providing housing affordability.
5. Foreign buyers aren’t going away
Foreign investors, especially the Chinese, are still looking to the US and Europe to store their wealth in real estate, away from the slowing economy of their homeland. This trend is not going away in 2017 as the repressive financial policies abroad are not expected to change anytime soon.
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