SANTA CLARA, Calif.,
Nov. 30, 2016 /PRNewswire/ -- The
2017 housing market will be a year of slowing, yet moderate growth,
set against the backdrop of a changing composition of home buyers
and a post-election interest rate jump that could potentially price
some first-timers out of the market, according to the realtor.com®
2017 housing forecast released today.
The report also predicts the top five housing trends of 2017, as
well as home prices and sales for the 100 largest metros in the
U.S. Realtor.com® is a leading online real estate destination
operated by News Corp [NASDAQ: NWS, NWSA]; [ASX: NWS, NWSLV]
subsidiary Move, Inc.
2017 national housing forecast
The 2017 national real
estate market is predicted to slow compared to the last two years,
across the majority of economic indicators. Home prices are
anticipated to increase 3.9 percent and existing home sales are
forecasted to increase 1.9 percent to 5.46 million homes. Interest
rates are expected to reach 4.5 percent due to higher expectations
for inflationary pressure in the year ahead.
Realtor.com® is forecasting the homeownership rate will
stabilize at 63.5 percent after bottoming at 62.9 percent in 2016.
New home sales are expected to grow 10 percent, while new home
starts are expected to increase 3 percent. The forecast is based on
GDP growth of 2.1 percent, a 2.5 percent increase in the consumer
price index and unemployment declining to 4.7 percent by the end of
the year.
Prior to this month's election, demographics and an improving
economy were laying the foundation for a substantial increase in
first-time buyers in 2017, but due to mortgage rate increases over
the last few weeks realtor.com® predicts first timers will face new
hurdles as they navigate the qualification and buying process.
These higher rates are associated with anticipation of stronger
economic and wage growth next year, both of which favor buyers.
However, higher rates will make qualifying for a mortgage and
finding affordable inventory more challenging.
"We don't expect the outcome of the election to have a direct
impact on the health of the housing market or economy as we close
out 2016. However, the 40 basis points increase in rates in the
days following the election has caused us to increase our interest
rate prediction for next year," said Jonathan Smoke, chief economist for
realtor.com®. "With more than 95 percent of first-time home buyers
dependent on financing their home purchase, and a majority of
first-time buyers reporting one or more financial challenges, the
uptick we've already seen may price some first-timers out of the
market."
Top Housing Trends for 2017
Next year's predicted
slowing price and sales growth, increasing interest rates and
changing buyer demographics are setting the stage for five key
housing trends:
- Millennials and boomers will dominate the market –– Next
year, the housing market will be in the middle of two massive
demographic waves, millennials and baby boomers – that will power
demand for at least the next 10 years. Although increasing interest
rates have prompted realtor.com® to lower its prediction of
millennial market share to 33 percent of the buyer pool;
millennials and baby boomers will still comprise the majority of
the market. Baby boomers are expected to make up 30 percent of
buyers in 2017 and given they're less dependent on financing, they
are anticipated to be more successful when it comes to
closing.
- Midwestern cities will continue to be hotbeds for
millennials – Midwestern cities are anticipated to
continue to beat the national average in millennial purchase market
share in 2017 with Madison, Wis.;
Columbus, Ohio; Omaha, Neb.; Des
Moines, Iowa; and Minneapolis, leading the pack. This year,
average millennial market share in these markets is 42 percent, far
higher than the U.S. average of 38 percent. With strong
affordability in 15 of the 19 largest Midwestern markets,
realtor.com® expects this trend to continue in 2017 even
as interest rates increase.
- Slowing price appreciation – Nationally, home prices are
forecast to slow to 3.9 percent growth year over year, from an
estimated 4.9 percent in 2016. Of the top 100 largest metros in the
country, 26 markets are expected to see price acceleration of 1
percent point or more with Greensboro-High
Point, N.C.; Akron, Ohio;
and Baltimore-Columbia-Towson,
Md., experiencing the largest gains. Likewise, 46
markets are expected to see a slowdown in price growth of 1 percent
or more with Lakeland-Winter Haven, Fla., Durham-Chapel Hill,
N.C.; and Jackson, Miss.,
undergoing the biggest shift to slower price appreciation.
- Fewer homes on the market and fast moving markets –
Inventory is currently down an average of 11 percent in the top 100
metros in the U.S. The conditions that are limiting home supply are
not expected to change in 2017. Median age of inventory is
currently 68 days in the top 100 metros, which is 14 percent – or
11 days – faster than U.S. overall.
- Western cities will continue to lead the nation in prices
and sales – Western metros in the U.S. are forecast to see a
price increase of 5.8 percent and sales increase of 4.7 percent,
much higher than the U.S. overall. These markets also dominate the
ranking of the realtor.com® 2017 top housing markets, making up
five of the top 10 markets on the list (Los Angeles, Sacramento and Riverside, Calif., Tucson, Ariz., and Portland, Ore.) and 11 of the top 25
(Colorado Springs, Colo.;
San Diego; Salt Lake City; Provo-Orem,
Utah; Seattle. and
Oxnard-Thousand Oaks-Ventura, Calif.)
Top 2017 housing markets
Despite a more moderate
housing market overall in 2017, strong local economies and
population growth will continue to fuel the nation's top markets.
The realtor.com® 2017 top 10 housing markets based on
price and sales gains are: 1. Phoenix-Mesa-Scottsdale,
Ariz.; 2. Los Angeles-Long
Beach-Anaheim, Calif.; 3.
Boston-Cambridge-Newton,
Mass.-N.H.; 4. Sacramento--Roseville--Arden-Arcade, Calif.; 5.
Riverside-San Bernardino-Ontario, Calif.; 6. Jacksonville, Fla.; 7. Orlando-Kissimmee-Sanford,
Fla.; 8. Raleigh, N.C.; 9.
Tucson, Ariz.; and 10.
Portland-Vancouver-Hillsboro,
Ore.-Wash.
These top 10 markets are forecast to see average price gains of
5.8 percent and sales growth of 6.3 percent, exceeding next year's
anticipated national growth of 3.9 percent and 1.9 percent,
respectively. But when compared to last year, prices in eight of
the top 10 markets are expected to decelerate with only
Los Angeles and Tucson, Ariz. showing stronger growth than
last year. Other commonalities among the top 10 housing markets
include: relatively affordable rental prices, low unemployment,
large populations of millennials and baby boomers, as well as a
high number of listing views on realtor.com®. See
Table 1 for the ranking of the top 100 largest metros in the U.S.,
as well as their price and sales forecasts.
Table 1: Realtor.com®'s 2017
Housing Forecast – Top 100 Metros
|
Rank
|
MSA
|
Price
|
Sales
|
Rank
|
MSA
|
Price
|
Sales
|
1.
|
Phoenix-Mesa-Scottsdale, Ariz.
|
5.9%
|
7.2%
|
51.
|
Greensboro-High
Point, N.C.
|
5.5%
|
3.6%
|
2.
|
Los Angeles-Long
Beach-Anaheim, Calif.
|
6.9%
|
6.0%
|
52.
|
Scranton--Wilkes-Barre--Hazleton, Pa.
|
2.4%
|
6.6%
|
3.
|
Boston-Cambridge-Newton, Mass.-N.H.
|
6.1%
|
6.3%
|
53.
|
Tulsa,
Okla.
|
4.9%
|
4.0%
|
4.
|
Sacramento--Roseville--Arden-Arcade,
Calif.
|
7.2%
|
4.9%
|
54.
|
Augusta-Richmond
County, Ga.-S.C.
|
4.3%
|
4.6%
|
5.
|
Riverside-San
Bernardino-Ontario, Calif.
|
5.0%
|
6.9%
|
55.
|
Spokane-Spokane
Valley, Wash.
|
4.8%
|
4.0%
|
6.
|
Jacksonville,
Fla.
|
4.8%
|
7.0%
|
56.
|
Indianapolis-Carmel-Anderson, Ind.
|
3.7%
|
5.0%
|
7.
|
Orlando-Kissimmee-Sanford, Fla.
|
5.7%
|
6.1%
|
57.
|
McAllen-Edinburg-Mission, Texas
|
3.6%
|
5.1%
|
8.
|
Raleigh,
N.C.
|
4.2%
|
7.6%
|
58.
|
Greenville-Anderson-Mauldin, S.C.
|
5.0%
|
3.6%
|
9.
|
Tucson,
Ariz.
|
6.1%
|
5.5%
|
59.
|
Philadelphia-Camden-Wilmington,
Pa.-N.J.-Del.-Md.
|
5.5%
|
3.1%
|
10.
|
Portland-Vancouver-Hillsboro, Ore.-Wash.
|
6.6%
|
5.0%
|
60.
|
Atlanta-Sandy
Springs-Roswell, Ga.
|
5.9%
|
2.7%
|
11.
|
Durham-Chapel Hill,
N.C.
|
2.6%
|
9.0%
|
61.
|
Birmingham-Hoover,
Ala.
|
4.2%
|
4.3%
|
12.
|
Colorado Springs,
Colo.
|
4.8%
|
6.7%
|
62.
|
Washington-Arlington-Alexandria,
D.C.-Va.-Md.-W.Va.
|
3.9%
|
4.6%
|
13.
|
Jackson,
Miss.
|
2.0%
|
9.4%
|
63.
|
Worcester,
Mass.-Conn.
|
3.5%
|
5.0%
|
14.
|
Detroit-Warren-Dearborn, Mich.
|
5.2%
|
6.2%
|
64.
|
Baton Rouge,
La.
|
2.9%
|
5.5%
|
15.
|
San Diego-Carlsbad,
Calif.
|
6.5%
|
4.9%
|
65.
|
Omaha-Council Bluffs,
Neb,-Iowa
|
3.7%
|
4.6%
|
16.
|
Salt Lake City,
Utah
|
6.7%
|
4.7%
|
66.
|
Cape Coral-Fort
Myers, Fla.
|
2.9%
|
5.4%
|
17.
|
Deltona-Daytona
Beach-Ormond Beach, Fla.
|
3.1%
|
8.2%
|
67.
|
Urban Honolulu,
Hawaii
|
4.6%
|
3.8%
|
18.
|
Provo-Orem,
Utah
|
5.2%
|
5.8%
|
68.
|
Oklahoma City,
Okla.
|
4.1%
|
4.2%
|
19.
|
Austin-Round Rock,
Texas
|
3.5%
|
7.4%
|
69.
|
Cleveland-Elyria,
Ohio
|
3.6%
|
4.7%
|
20.
|
Seattle-Tacoma-Bellevue, Wash.
|
7.4%
|
3.4%
|
70.
|
Virginia
Beach-Norfolk-Newport News, Va.-N.C.
|
4.4%
|
3.8%
|
21.
|
Charlotte-Concord-Gastonia, N.C.-S.C.
|
4.3%
|
6.3%
|
71.
|
Miami-Fort
Lauderdale-West Palm Beach, Fla.
|
4.0%
|
4.2%
|
22.
|
Oxnard-Thousand
Oaks-Ventura, Calif.
|
5.2%
|
5.4%
|
72.
|
Memphis,
Tenn.-Miss.-Ark.
|
3.8%
|
4.2%
|
23.
|
New
York-Newark-Jersey City, NY-N.J.-Pa.
|
4.0%
|
6.5%
|
73.
|
Harrisburg-Carlisle,
Pa.
|
4.9%
|
3.1%
|
24.
|
Providence-Warwick,
R.I.-Mass.
|
6.3%
|
4.1%
|
74.
|
Palm
Bay-Melbourne-Titusville, Fla.
|
4.8%
|
3.1%
|
25.
|
North
Port-Sarasota-Bradenton, Fla.
|
5.0%
|
5.4%
|
75.
|
Ogden-Clearfield,
Utah
|
3.9%
|
4.0%
|
26.
|
Denver-Aurora-Lakewood, Colo.
|
6.4%
|
4.0%
|
76.
|
Louisville/Jefferson
County, K.-Ind.
|
3.2%
|
4.7%
|
27.
|
Pittsburgh,
Pa.
|
4.1%
|
6.1%
|
77.
|
St. Louis,
Mo.-Ill.
|
3.5%
|
4.4%
|
28.
|
Stockton-Lodi,
Calif.
|
6.1%
|
4.0%
|
78.
|
Albuquerque,
N.M.
|
3.6%
|
4.1%
|
29.
|
Houston-The
Woodlands-Sugar Land, Texas
|
4.0%
|
6.1%
|
79.
|
Richmond,
Va.
|
5.2%
|
2.6%
|
30.
|
Boise City,
Idaho
|
4.8%
|
5.3%
|
80.
|
Winston-Salem,
N.C.
|
2.7%
|
5.1%
|
31.
|
Tampa-St.
Petersburg-Clearwater, Fla.
|
4.8%
|
5.1%
|
81.
|
Minneapolis-St.
Paul-Bloomington, Minn.-Wis.
|
4.1%
|
3.6%
|
32.
|
Grand Rapids-Wyoming,
Mich.
|
5.8%
|
4.2%
|
82.
|
Des Moines-West Des
Moines, Iowa
|
2.9%
|
4.3%
|
33.
|
New Orleans-Metairie,
La.
|
4.0%
|
5.9%
|
83.
|
Kansas City,
Mo.-Kan.
|
4.4%
|
2.7%
|
34.
|
Springfield,
Mass.
|
4.7%
|
5.1%
|
84.
|
New Haven-Milford,
Conn.
|
4.4%
|
2.6%
|
35.
|
Bakersfield,
Calif.
|
5.3%
|
4.5%
|
85.
|
Columbia,
S.C.
|
3.4%
|
3.6%
|
36.
|
Las
Vegas-Henderson-Paradise, Nev.
|
5.1%
|
4.6%
|
86.
|
Toledo,
Ohio
|
4.7%
|
2.1%
|
37.
|
San
Francisco-Oakland-Hayward, Calif.
|
8.4%
|
1.2%
|
87.
|
El Paso,
Texas
|
3.9%
|
2.9%
|
38.
|
Cincinnati,
OH-KY-IN
|
3.2%
|
6.4%
|
88.
|
Akron,
Ohio
|
4.8%
|
1.9%
|
39.
|
San
Jose-Sunnyvale-Santa Clara, Calif.
|
8.3%
|
1.3%
|
89.
|
Youngstown-Warren-Boardman, Ohio-Pa
|
4.8%
|
1.9%
|
40.
|
Lakeland-Winter
Haven, Fla.
|
4.6%
|
4.9%
|
90.
|
Little Rock-North
Little Rock-Conway, Ark.
|
3.0%
|
3.6%
|
41.
|
San Antonio-New
Braunfels, Texas
|
3.3%
|
6.2%
|
91.
|
Dayton,
Ohio
|
4.3%
|
2.2%
|
42.
|
Columbus,
Ohio
|
3.8%
|
5.7%
|
92.
|
Wichita,
Kan.
|
3.9%
|
2.5%
|
43.
|
Fresno,
Calif.
|
3.7%
|
5.8%
|
93.
|
Allentown-Bethlehem-Easton, Pa.-N.J.
|
3.1%
|
3.0%
|
44.
|
Knoxville,
Tenn.
|
3.1%
|
6.3%
|
94.
|
Syracuse,
N.Y.
|
3.4%
|
2.6%
|
45.
|
Rochester,
N.Y.
|
3.1%
|
6.3%
|
95.
|
Baltimore-Columbia-Towson, Md.
|
3.0%
|
2.9%
|
46.
|
Charleston-North
Charleston, S.C.
|
3.3%
|
6.1%
|
96.
|
Buffalo-Cheektowaga-Niagara Falls, N.Y.
|
3.4%
|
2.1%
|
47.
|
Nashville-Davidson--Murfreesboro--Franklin,
Tenn.
|
4.9%
|
4.4%
|
97.
|
Albany-Schenectady-Troy, N.Y.
|
1.8%
|
3.5%
|
48.
|
Dallas-Fort
Worth-Arlington, Texas
|
4.1%
|
5.1%
|
98.
|
Hartford-West
Hartford-East Hartford, Conn.
|
4.7%
|
0.4%
|
49.
|
Milwaukee-Waukesha-West Allis, Wis.
|
4.7%
|
4.5%
|
99.
|
Bridgeport-Stamford-Norwalk, Conn.
|
1.9%
|
2.6%
|
50.
|
Madison,
Wis.
|
3.8%
|
5.4%
|
100.
|
Chicago-Naperville-Elgin, Ill.-Ind.-Wis.
|
2.0%
|
2.3%
|
Forward-Looking Statements
This document contains certain "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act
of 1995. These statements are based on management's views and
assumptions regarding future events and business performance as of
the time the statements are made. Actual results may differ
materially from these expectations due to changes in global
economic, business, competitive market and regulatory and other
factors. More detailed information about these and other factors
that could affect future results is contained in News Corp's
filings with the Securities and Exchange Commission. The
"forward-looking statements" included in this document are made
only as of the date of this document and we do not have any
obligation to publicly update any "forward-looking statements" to
reflect subsequent events or circumstances, except as required by
law.
About realtor.com®
Realtor.com® is the trusted resource for home buyers,
sellers and dreamers, offering the most comprehensive source of
for-sale properties, among competing national sites, and the
information, tools and professional expertise to help people move
confidently through every step of their home journey. It pioneered
the world of digital real estate 20 years ago, and today helps make
all things home simple, efficient and enjoyable.
Realtor.com® is operated by News Corp [NASDAQ: NWS,
NWSA] [ASX: NWS, NWSLV] subsidiary Move, Inc. under a perpetual
license from the National Association of REALTORS®. For
more information, visit realtor.com®.
Media Contact:
Realtor.com®
Lexie Puckett Holbert –
lexie.puckett@move.com
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