As residential properties are expected to be a major driver for the U.S. economy, some key trends will affect how the sector performs in 2017. From an increase in interest rates to the construction of more new homes, some industry indicators could potentially change the recent trends that created a significant impact on the market from the previous year.
Those who look to be involved in turn key real estate investing and other types of property investments should closely monitor these trends as 2017 rolls out.
U.S. housing will likely contribute to 15% of the country’s GDP this year. That may take place if the economy finally surges ahead and take some leverage from a resurgence of residential activity. Assuming lending standards become more relaxed and builders have once again gained confidence in expanding businesses, there’s not much the housing sector could do to improve the economy.
However, some signs point to a rosy future. Fannie Mae and Freddie Mac are scheduled to start backing higher mortgages this year for the first time in over a decade. This is expected to provide some relief for homebuyers to fund their acquisitions in expensive markets.
A bigger appetite for homes among buyers and higher wages could also motivate homebuilders to build more projects.
Another trend that will partly reshape the housing market in the U.S. involves a change in the millennial buyers’ preferred location for their first houses. According to data from Ellie Mae, millennials are avoiding high-cost coastal cities to purchase their new home.
The Millennial Tracker report listed Minneapolis as the top city the with the most number of millennial home buyers, as 44% of housing deals were snapped up by people born between 1980 and 1999.
Philadelphia, St. Louis, Chicago and Detroit rounded up the top five cities with the largest number of millennial buyers, while Miami, Los Angeles, San Francisco, San Diego and Tampa, Fla., were the cities with the least amount of buyers from the millennial generation.
Whether you're planning to buy or sell a property, it's important to take note of these trends for you to not get left behind.