Year 2016 was marked by low interest rates and a surge of millennials entering the housing market, so what can real estate professionals expect to see in 2017? I checked a report from the National Association of Realtors.
Here's a portion of that report:
"The suburbs are not dying, in fact John Burns Consulting says almost 80 percent of residential growth to occur in suburban communities over the next 10 years.
"Suburbs are, however, incorporating urban amenities like pedestrian-friendly shopping areas, general walkability, and entertainment options. This new type of suburbia also has a new name: Surban."
The report continues by pointing out the advantages to consumers by combining the element of urban and suburban living.
"These developments are more than simply mixed-use," says Danielle Leach, a senior consultant at John Burns Real Estate Consulting in Chicago. "Surban living is becoming a new way of life for many: where the blend of urban and suburban living provides the best of both worlds."
Q: Is the conforming mortgage limit being increased?
A: Yes, the federal government is increasing the limit for conforming mortgages from $417,000 to $424,100 in most regions of the United States starting January 1, 2017, the Federal Housing Finance Agency announced.
This is the first such increase since 2006, it was reported by the Mortgage Bankers Association.
"The approximately 1.7 percent bump in the baseline conforming loan limit follows the FHFA's announcement that the average U.S. home price has returned to its pre-decline peak, which it hit in the third quarter of 2007," according to the report.
Q: How are sales of existing homes progressing?
A: Existing-home sales ascended in October for the second straight month and eclipsed June's cyclical sales peak to become the highest annualized pace in nearly a decade, according to the National Association of Realtors. All major regions saw monthly and annual sales increases in October.
Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, grew 2.0 percent to a seasonally adjusted annual rate of 5.60 million in October from an upwardly revised 5.49 million in September. October's sales pace is 5.9 percent above a year ago (5.29 million) and surpasses June's pace (5.57 million) as the highest since February 2007 (5.79 million).
Q: Are mortgage rates rising?
A: Yes, rates are creeping up. Freddie Mac released the results of its Primary Mortgage Market Survey, showing average fixed mortgage rates moving higher with the average 30-year fixed-rate mortgage topping 4 percent for the first time since 2015.
Q: What is driving the mortgage market?
A: The demand for mortgages to finance the purchase of homes is the key driver currently. Mortgage applications increased 5.5 percent from one week earlier, according to data from the Mortgage Bankers Association's (Mortgage Applications Survey.
The Market Composite Index, a measure of mortgage loan application volume, increased 5.5 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 3 percent. The Refinance Index decreased 3 percent from the previous week to its lowest level since January 2016. The seasonally adjusted Purchase Index increased 19 percent from one week earlier.
Q: Are sales of newly built homes still rising?
A: No. Sales of newly built, single-family homes dropped 1.9 percent in October, but builders believe the dip to be temporary.
New-homes sales reached a seasonally adjusted annual rate of 563,000 units, according to the Commerce Department.
"Though slightly down from last month, new home sales have been on an upward trend since last year," says Ed Brady, chairman of the National Association of Home Builders.
To find out more about Jim Woodard and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com. Jim Woodard's email: [email protected] COPYRIGHT 2016 CREATORS.COM.