Affordability pressures are expected to dampen – but not extinguish – buyer enthusiasm in the coming year
By Jesse Darland
CTW Features
While existing-home sales are expected to rise slightly in 2017, such gains are expected to be small due to rising mortgage rates and low consumer confidence. Those are the findings of a new consumer survey and 2017 housing forecast from the National Association of Realtors.
In the Housing Opportunities and Market Experience (HOME) survey, respondents were asked about their confidence in the overall economy and their expectations for 2017.
Lawrence Yun, the National Association of Realtors’ chief economist, believes that declines in affordability are behind the weakening morale. “Rents and home prices outpacing incomes and scant supply in the affordable price range has been a prominent headwind for many prospective buyers this year,” Yun says. “Making matters worse, the unwelcoming reality of higher mortgage rates since the election is likely further holding back confidence. Younger households, renters and those living in the costlier West region — where prices have soared in recent months — are the least optimistic about buying.”
Even still, roughly two-thirds (62 percent) of current home buyers think it’s a good time to sell. Respondents living west of the Mississippi were most likely to share that opinion. Nearly all surveyed (91 percent) do not expect an increase in their community over the next six months. Those most likely to expect such an increase were people living in suburban areas, renters and those living in the West.
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