Another new year is around the corner...the first year of Trump's presidency. If you're a homeowner or homebuyer, you're probably wondering what 2017 will bring. As we've previously discussed, we already know that home sales and prices will continue to increase (not at the rate they did in 2016, but upwards is still the trend). However, a new administration does mean change. Three major policy changes anticipated to have an effect on the real estate market are: immigration reform, tax cuts, and new infrastructure spending. We also expect to see a shift in millennial renters moving inland and becoming homeowners in more affordable areas.
1. More access to home loans.Government-sponsored mortgage giants will be backing higher mortgages, increasing loan limits and, therefore, making it easier for homebuyers to qualify for mortgages in high-priced markets. A more stable FHA could also mean lower FHA fees and, with the privatization of Freddie Mac and Fannie Mae on Trump's to-do list, this too could have a major effect on the market (though possibly not until 2018).
2. Mortgage rates raising by very little.From October to December we saw rates increase .5% making many potential homebuyers nervous of what's to come. While rates are still expected to increase, they will not exceed 4.3% for a 30-year fixed rate loan which, as aforementioned, is still fairly low.
3. Slowdown in new construction.Considering 25% of construction workers are foreign born, Trump's new policies on immigration could seriously dampen construction. 2016 saw massive growth in new construction projects, particularly residential. However, current labor shortages combined with potential immigration change may bring construction to a standstill.
4. Strong sellers' market.As the job market continues to strengthen it is expected that demand will outweigh supply, making 2017 a sellers' market.
All in all, things are looking up for the housing market. The raise in rates is likely to taper off, potential buyers will more easily be able to qualify for a loan, and homeowners looking to sell will certainly get their return on investment.
Author:Kurt Galitski Phone: 714-957-6677 Dated: December 22nd 2016 Views: 163 About Kurt: After 15 years of founding and running a successful boutique real estate office in Costa Mesa as a l...
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