Saturday, January 7, 2017, AM | Leave Comment
One of the smartest and most sensible New Year’s resolution you can make for 2017 would be to buy to purchase a residential property, but you need to understand certain factors affecting the housing market before you sit down at the closing table.
Most economists and financial analysts believe that the American housing market will experience growth in 2017, but the improvement will not be evenly felt in all regions of the United States.
As a prospective home buyer in 2017, here are four market conditions you will need to pay close attention to.
Shortly after the unlikely election of New York billionaire Donald Trump to the U.S. White House, the Chair of the Federal Reserve stated that interest rates would be raised once before the end of 2016 and at least twice in 2017.
Most economists believe that the Fed will stick to these promises, and thus monthly mortgage payments will become more expensive; you need to keep this in mind when applying for home financing.
Although real estate analytics firms such as CoreLogic are predicting that home values will rise in 2017, you should not expect a housing bubble.
If you see a listing price that is five percent higher than 2016, you will need to check with a realtor if the proposal is reasonable.
For example, if you are looking at homes in the suburbs of Detroit, a Century 21 Town & Country agent would be able to let you know whether the prices you are looking at can be negotiated downward.
Although home builders are confident that they will be able to start new projects in early 2017, housing inventories are expected to remain at low levels during the first quarter.
If you are looking to purchase an investment property, you will likely be able to derive rental income in the first three months of the year. Once residential construction projects reach their completion period, vacancy rates will improve and you might not be able to get as much rental income as in early 2017.
Mortgage Lending and Credit Risk
The incoming Trump administration may move to dismantle the Consumer Financial Protection Bureau so that mortgage lenders can have greater leeway in terms of giving home loans to borrowers whose credit history is less than stellar.
It is unlikely that the CFPB will go away, but easier lending guidelines may favor you in 2017.
In the end, 2017 could be a good year for purchasing a home, but you and your realtor will need to keep a close eye on economic developments for the purpose of making the right decision.Facebook.com/doable.finance