RISMedia's Real Estate Magazine

MAR 2017

Real Estate magazine is the industry's leading source for real estate news and information since 1980. Published monthly by RISMedia, Real Estate magazine offers timely and relevant real estate news to the industry's top brokers and agents.

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RISMedia's REAL ESTATE March 2017 61 Many areas across the country saw sales prices touch their pre-2007 values, while mortgage rates re- mained historically low. Nationally, home values increased 3.85 percent from the previous year. The num- ber of unsold homes in the United States fell to 1.65 million units at the end of 2016, as reported by the National Association of REALTORS®, the lowest since 1999, when they first started tracking this data. Market conditions continue to vary greatly across the country, but there's a positive trend emerging for buyers in 2017. As demand for homes remains strong, inventory will continue to be a challenge, but there are signs that the situation will im- prove. The National Association of Home Builders predicts 1.24 million housing starts in 2017, compared to the 1.16 million starts in 2016. Additionally, home builder sentiment has been gradually trending upward. In the first month of Donald Trump's presidency, we witnessed the Dow Jones Industrial Average close over 20,000 for the first time in history, and the administration has made it clear that business-friendly policy will be a priority. The administration also signaled it will encourage infrastruc- ture investment and a more positive monetary policy. These conditions, coupled with a rising interest rate en- vironment, can stimulate a gradual increase in inflation. There's no way to definitively pre- dict the path of interest rates this year, but the Federal Reserve has indicated there will likely be more interest rate increases in 2017. Mortgage interest rates are mostly impacted by movements in the bond market, not the Federal Reserve's short-term interest rate policy. The bond traders that influence long- term rates (like those used for mort- gages) are trying to make educated guesses about where the economy will be in 10 - 15 years. Some of these predictions, which are focused on growth, can lead to higher rates. Looking ahead, we'll need to keep an eye on affordability throughout the year, with the possibility of in- creased home prices combined with potentially higher rates creating chal- lenges in some markets. In the near term, I'm sure spring 2017 will be a robust home-buying season. Consumers will be compet- ing for available homes and rushing to lock in their low interest rate. RE Derek Latka is vice president of business development for Quicken Loans. For more information, please contact the Quicken Loans Agent Relations team at AgentRe- lations@QuickenLoans.com,or call (866) 718-9842. Positive Trends to Emerge for Buyers in 2017 Commentary by Derek Latka A s we prepare for what's in store for 2017, it's important to review what we learned in the last year. In 2016, home prices experienced increases, despite the predictions of many that prices would fall for the first time since the recovery began. Home price gains were buoyed mostly by limited inventory, with entry-level homes being particularly short in supply. Looking ahead, we'll need to keep an eye on affordability throughout the year, with the possibility of increased home prices combined with potentially higher rates creating challenges in some markets.

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