{"id":2848,"date":"2017-03-03T08:46:57","date_gmt":"2017-03-03T12:46:57","guid":{"rendered":"http:\/\/dankrell.com\/blog\/?p=2848"},"modified":"2020-02-08T08:13:11","modified_gmt":"2020-02-08T13:13:11","slug":"housing-market-2017","status":"publish","type":"post","link":"https:\/\/dankrell.com\/blog\/2017\/03\/03\/housing-market-2017\/","title":{"rendered":"Housing market 2017"},"content":{"rendered":"
\"housing<\/a>
Housing Market 2017(infographic from RE\/MAX National Housing Report remax.com)<\/figcaption><\/figure>\n

There\u2019s no doubt that 2016 was an outstanding year for real estate and the housing market.\u00a0 In fact, National Association of Realtors chief economist Lawrence Yun was reported to say in a January NAR press release<\/a> (www.nar.realtor) that the 2016 housing market was the best since the Great Recession.\u00a0 There were 5.45 million total existing home sales in 2016, which exceeded 5.25 million during 2015.\u00a0 What is necessary for a great housing market 2017, and how will it finish the year?<\/p>\n

January’s sales were strong and Dr Yun stated in the press release that there is “resilience” in a “rising interest rate environment:”<\/p>\n

\n

“Much of the country saw robust sales activity last month as strong hiring and improved consumer confidence at the end of last year appear to have sparked considerable interest in buying a home…<\/p>\n

Market challenges remain, but the housing market is off to a prosperous start as home buyers staved off inventory levels that are far from adequate and deteriorating affordability conditions.”<\/p>\n<\/blockquote>\n

Home prices also surged during 2016.\u00a0 A February 28th<\/sup> S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index press release<\/a> (spindices.com) indicated a 30-month index high, increasing 5.8 percent during December.\u00a0 The Seattle, Portland and Denver regions were at the top during this period, posting gains of 10.8 percent, 10.0 percent and 8.9 percent respectively (the Washington DC region gained a respectable 4.2 percent).\u00a0 David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices stated:<\/p>\n

\n

“Home prices continue to advance, with the national average rising faster than at any time in the last two-and-a-half years…One factor behind rising home prices is low inventory. While sales of existing single family homes passed five million units at annual rates in January, the highest since 2007, the inventory of homes for sales remains quite low with a 3.6 month supply. New home sales at 555,000 in 2016 are up from recent years but remain below the average pace of 700,000 per year since 1990. Another factor supporting rising home prices is mortgage rates. A 30-year fixed rate mortgage today is 4.2% compared to the 6.4% average since 1990. Another indicator that home price levels are normal can be seen in the charts of Seattle and Portland OR. In the boom-bust of 2005-2009, prices of low, medium, and high-tier homes moved together, while in other periods, including now, the tiers experienced different patterns.\u201d<\/p>\n<\/blockquote>\n

Of course, the record year was nowhere near the peak market pace of 6.48 million existing home sales during 2006.\u00a0 However, the economics of the market during that time was different; being influenced by outside forces such as uber-easy money policies and overzealous speculation in the housing market.<\/p>\n

The peak market sales records may be a benchmark <\/a>of a sort.\u00a0 But in retrospect<\/a>, those numbers are a reflection of a distorted market where speculators bought and sold homes in record numbers taking advantage of the easy money and a seemingly guaranteed big money payoff (which was a factor in the steep home appreciation spike at that time).\u00a0 It was a crazy time for housing, when homes were flipped in a matter of days.\u00a0 Many investors were even making money on homes they never owned by selling their interest in their purchase contracts.\u00a0 The result was that home buyers found themselves either priced out of the market, or borrowing more than they could realistically afford because of the fierce buyer competition.<\/p>\n

After posting impressive housing stats for 2016, the expectations for housing market 2017 are high.\u00a0 And not surprisingly home sales started the year on the same pace, as the NAR reported January\u2019s existing home sales (homes that settled during January) increased 3.3 percent.\u00a0 However, the pending home sale index <\/a>(homes under contract and described by NAR as a forward looking number) showed a different picture with 2.8 percent decrease during January.\u00a0 Of course in the absence of bad weather, some economists explain that the decrease in pending home sales are due to low inventory and rising interest rates.<\/p>\n

Housing Market 2017<\/h3>\n

Some are concerned about the decreased prospects of future home sales, suggesting that there won\u2019t be a repeat performance of record home sales during 2017.\u00a0 The recent pending home sale index release is reminiscent of the index reported for January 2014<\/a>, where the NAR reported that the pending home sale index dropped 9 percent following post-recession record year of home sales during 2013.\u00a0 At the end of 2014, it was revealed that existing home sales dropped 3 percent from the previous year.\u00a0 Reasons given for the decrease were low inventory and tight lending.<\/p>\n

Many, like myself, remain optimistic for housing market 2017 because interest rates remain historically low<\/a>, even with recent rate hikes; and mortgage lending has been the easiest since the financial crisis.\u00a0 The sentiment for housing market 2017 is also shared by consumers; who conveyed increased optimism about the housing market in Fannie Mae\u2019s 2017 Home Purchase Sentiment Index (HPSI)<\/a>.\u00a0 The February 17th<\/sup> News release (fanniemae.com) indicated that the January\u2019s HPSI increased 2 percent, which is 1.2 percent higher than the same time last year. Doug Duncan, senior vice president and chief economist at Fannie Mae, stated:<\/p>\n

\n

\u201cThree months after the presidential election, measures of consumer optimism regarding personal financial prospects and the economy are at or near the highest levels we\u2019ve seen in the nearly seven-year history of the National Housing Survey…However, any significant acceleration in housing activity will depend on whether consumers\u2019 favorable expectations are realized in the form of income gains sufficient to offset constrained housing affordability. If consumers\u2019 anticipation of further increases in home prices and mortgage rates materialize over the next 12 months, then we may see housing affordability tighten even more.\u201d<\/p>\n<\/blockquote>\n

Copyright \u00a9 Dan Krell
\nGoogle+<\/a><\/p>\n

If you like this post, do not copy; instead please:
\nlink to the article<\/a>,
\nlike it at facebook<\/a>
\nor re-tweet<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

There\u2019s no doubt that 2016 was an outstanding year for real estate and the housing market.\u00a0 In fact, National Association of Realtors chief economist Lawrence Yun was reported to say in a January NAR press release (www.nar.realtor) that the 2016 housing market was the best since the Great Recession.\u00a0 There were 5.45 million total existing … <\/p>\n

Continue reading “Housing market 2017”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[347,567,234,469,123,288,29,47,13,26],"tags":[558,966,893,936,870,466,705,807,505,797,593],"class_list":["post-2848","post","type-post","status-publish","format-standard","hentry","category-case-shiller-home-price-index","category-economics","category-economy","category-home-prices","category-home-sale","category-housing-market","category-market-conditions","category-market-report","category-real-estate","category-real-estate-market","tag-case-shiller","tag-economics","tag-economy","tag-home-prices","tag-home-sales","tag-housing-market-2","tag-market-analysis","tag-market-conditions","tag-market-report-2","tag-real-estate","tag-real-estate-market-2"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p1VZLf-JW","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"jetpack_likes_enabled":true,"_links":{"self":[{"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/posts\/2848","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/comments?post=2848"}],"version-history":[{"count":6,"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/posts\/2848\/revisions"}],"predecessor-version":[{"id":5964,"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/posts\/2848\/revisions\/5964"}],"wp:attachment":[{"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/media?parent=2848"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/categories?post=2848"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/tags?post=2848"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}