At the start of every new year, people make predictions of what the year will bring.
As the housing market has continued to improve and with a new president taking office, 2017 could prove to be an interesting year for the real estate world.
Here are Knoxville Home Team‘s 4 predictions for the Knoxville real estate market in 2017.
You don’t need a crystal ball to know that interest rates are going to rise in 2017. After the 2016 election, interest rates have jumped up half of a percentage point and have shown no signs of slowing down. And, for only the second time since 2006, the Fed issued a rate hike in the middle of December.
There is no saying how quickly or how much rates will increase in 2017, but for the first time in a long time interest rates will be rising. Keep in mind, the historic average for mortgage interest rates is 8%, so buying a home is still incredibly affordable.
During 2016, housing inventory was tight across the country. There were too many buyers and not enough houses, thus driving up prices. In 2017, we should expect to see much of the same.
There are still many buyers looking for homes and not enough homes hitting the market. In 2017, we’ll continue to see more buyers entering the market and not enough homes on the market to meet their needs.
In 2016, first time home buyers made up 35% of the home buying population, making them the biggest group of home buyers. That amount was up 3% from the previous year in 2015. We predict that in 2017 the amount of first time home buyers will increase again.
With news of interest rates and home prices rising, many first-time buyers will make the move into homeownership. With mortgage guidelines expected to ease in 2017, many first-time buyers will also find it easier to buy their first home.
Finally, we expect home prices to continue to rise in 2017. During 2016, home prices rose 4.8% nationally so far this year. But, we expect home prices to not increase as much as they have in the past few years.
With there still being a shortage of homes on the market, buyers will once again be competing for homes, particularly during the spring and summer months. This will cause home prices to rise once again in 2017.
Once again, we expect 2017 to be another great year for the Knoxville real estate market. Home prices will be steadily rising, but not at an insane rate. While interest rates will be rising, they won’t make buying a home unaffordable. If you’re thinking about buying a home in 2017, hit the market early to get the best deal.
Are you thinking about buying or selling a Knoxville home this year? Please let Knoxville Home Team know if there is any way that we can assist you in your Knoxville home search. Rick can be reached at 865-696-9002 or via email at [email protected]. Kati can be reached at [email protected].
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