Home sales will expand moderately in 2017 amid consumer confidence abated by increased mortgage rates and affordability concerns. According to the National Association of Realtors Housing Opportunity and Marketing Experience (H.O.M.E) survey, 57% of renters said that now is a good time to purchase a house. Among present homeowner, 78% said presently it is a good time to purchase. Both figures are below the last survey performed last year. In 2015, tenant’s confidence to purchase was at 68% while existing homeowners were at 82%.
The 2017 Housing Forecast Update which you can review here, is predicting that existing home sales will close out 2016 with an annual increase of 3.3% and reach about 5.42 million. This will be the best year recorded since 2006. NAR is also predicting that in 2017 existing home sales will increase slightly less at 2% to around 5.52 million. Home prices will continue to rise, increasing 5% this year and 4% in 2017, according to their predictions. The forecast also predicts that interest rates will increase to 4.6% and the Federal reserve will raise rates to 1.25%.
NAR Chief Economist Lawrence Yun said “Although the economy is expected to continue to expand with around 2 million net new job creations, existing home sales are expected to see little expansion next year because of affordability tensions from rising mortgage rates and prices continuing to outpace income growth. Yun also states that new affordable construction will be key in 2017. “Some would-be sellers may be reluctant to move up or trade down – especially if they’ve refinanced in recent years. That’s why it’s extremely necessary for homebuilders to step-up their production of homes catered to buyers in the affordable price range. Otherwise the nation’s low homeownership rate will struggle to shift higher in 2017.”
The report is in direct contravention to a Redfin report which projected that 2017 will be break 2016’s record for sales. Redfin also predicts that existing homes sales are will increase 2.8% in 2017 and inventory will recover to 1.7% year over year, after falling an estimated 3.4% in 2016.
With home sales to increase in 2017 we expect property management services in New York City to expand as well. Blue Harbour Property Management manages properties in Bronx, Brooklyn, Queens and Manhattan and surrounding regions. We tailor our services to maximize revenue potential for homeowners. If you are in need of property management you can contact us at 718-845-1185 for a free consultation.