The new year has begun, and there are many uncertainties for everyone. With a new administration coming into office, the future of the nation’s housing market is about to change. Every January we try to predict what the year will hold, although we cannot project everything correctly, we can get pretty close. Here is what is in store for us in 2017 in Southern California.
1. Home prices will continue to rise
Home prices are projected to increase by two percent. This past May and June saw some of the highest home prices in decades, driven mainly by new homes. The continual improvement in the employment market is the cause of the price increases.
2. More home sales
Home sales in Southern California will continue to rise throughout the new year. This is also driven by new jobs and rising incomes, therefore they will be looking for homes.
3. Builders will be busier
Construction is expected to increase three percent in the next year. Construction jobs are also predicted to rise 3.5 percent, equally to 106,000 new jobs.
4. Mortgage rates will go up
A fixed, 30-year mortgage will rise one percentage point above 2016’s 3.6 percent. This will cause home buying costs to rise while dampening home prices and sales, but not halting them.
5. Affordability will be down
Median incomes are only expected to pay 60 percent of the amount needed to buy a median-priced home. The affordability of housing in the area has remained low since the beginning of the Great Recession.