Best of the Week
Most Popular
1.Gold Price Trend Forecast, Where are the Gold Traders? - Bob_Loukas
2.Stocks Bear Market of 2017 Begins? Shorting the Dow At its Peak! - Nadeem_Walayat
3.Betting on President Trump Leaving Office Early, Presidency End Date - Betfair Market - Nadeem_Walayat
4.Why Stock Market Analysts Will be Wrong About 2017 - Clif_Droke
5.Is This The Best Way For Investors To Play The Electric Car Boom - OilPrice_Com
6.Silver Price 2017 Trend Forecast Update - Video - Nadeem_Walayat
7.Gold Price Set For Very Bullish 2017, Trend Forecast - Austin_Galt
8.10 Things I learned From Meetings With Trump’s Transition Team - - John_Mauldin
9.How Investors Can Profit From Trumps Military Ambitions - OilPrice_Com
10.Channel 4 War on 'Fake News', Forgets Own Alt Reality Propaganda Broadcasting - Nadeem_Walayat
Last 7 days
Trump Relinquishes Control of Foreign Policy - 26th Feb 17
[Gratis] "Dark Money" Secrets Revealed! - 26th Feb 17
Stock Market SPX New All-time Highs Continue - 25th Feb 17
POWERFUL GOLD & SILVER COILED SPRINGS: Important Charts You Have To See - 25th Feb 17
Underperformance in Gold Stocks Argues for Interim Peak - 25th Feb 17
Watch What Happens When Silver Price Hits $26...  - 25th Feb 17
Gold Futures Buying Yet to Start - 25th Feb 17
When the Stock Market Flying Pig Tops - 24th Feb 17
Gold, Second Fed Hike and Interest Rates - 24th Feb 17
Bitcoin Price Hits Record High! - 24th Feb 17
Another Stock Market Bubble? Bring it On! - 24th Feb 17
What Investors Need To Know About U.S. Money Market Funds? - 24th Feb 17
When Was America’s Peak Wealth? - 24th Feb 17
The Oscars – Worth Their Weight in Gold? - 24th Feb 17
The Best Reasons to Buy Gold in the Age of Trump - 22nd Feb 17
Silver, The Return of Stagflation - 22nd Feb 17
Why EU BrExit Single Market Access Hard line is European Union Committing Suicide - 22nd Feb 17
Gold: Short End US Rates Matter More Than Long End Real Yields - 22nd Feb 17
CONTINENTAL RESOURCES: Example Of What Is Horribly Wrong With The U.S. Shale Oil Industry - 22nd Feb 17
Here’s Proof Rising Rates Are Good for Gold - 21st Feb 17
Gold and Silver Weekly Update - 21st Feb 17
US Dollar and Gold Battle of the Cycles - 21st Feb 17
NSA and CIA is the Enemy of the People - 21st Feb 17
Big Moves in the World Stock Markets - Big Bases - 21st Feb 17
Stock Market Uptrend Continues - 21st Feb 17
Brent Crude Oil Price Technical Update: Low Volatility Leads to High Volatility - 20th Feb 17
Trump’s Tax System Could Spark The Wave Of Self-Employment - 20th Feb 17
Here’s How to Stay Ahead of Machines and AI - 20th Feb 17
Warning Signs Of Instability In Russia - 20th Feb 17
Warning: This Energy Investment Could Wreak Havoc On Your Portfolio - 20th Feb 17
The Mother of All Financial Bubbles will be Unimaginably Destructive when it Bursts - 19th Feb 17
Gold’s Fundamentals Strengthen - 18th Feb 17
The Flynn Fiascom, the Trump Revolution Ends in a Whimper - 18th Feb 17
Not Nearly Enough Economic Growth To Keep Growing - 18th Feb 17
SPX Stocks Bull Market Continues to make New Highs - 18th Feb 17
China Disaster to Trigger Gold Run, Trump to Appoint 5 of 7 Fed Governors - 18th Feb 17

Market Oracle FREE Newsletter

State of Global Markets 2017 - Report

Four Major Trends to Expect from the U.S. Housing Market in 2017

Housing-Market / US Housing Jan 09, 2017 - 04:54 PM GMT

By: Nicholas_Kitonyi

Housing-Market

2017 is already off to an interesting start in the global real estate market and the forces of demand and supply are building up momentum that will determine the pace of the markets this year. In the UK, home prices ended up 7.2% in 2016 in contrast to the prevailing fears that the UK housing market will suffer a post-Brexit crash after London recorded weakness in house prices. Now, many housing market analysts think that the UK housing market has survived the worst ; hence, they believe that 2017 could be a bullish year in the real estate markets.


The United States also had its version of a Brexit vote in the surprise victory of Donald Trump in the U.S. presidential elections. Many people had expected the U.S. economy to crash in the 'unlikely' event of Trump's victory but such gloomy outlooks turned out to be false as major U.S. market indexes made new highs. This post explores four major trends that you can expect from the U.S. housing market in 2017.

 New home constructions could spike

In 2015, the average annual rate of new groundbreaking in the United States was 1.108 million. In 2016, data on average annual rate of new groundbreaking showed a decent 5% increase to 1.263 million. In 2017, the trend of an increase in new home constructions will most likely continue at a faster pace because builders have more reasons to be positive about the markets going forward. The fact that lenders will lower their qualifying requirements and an increase in demand in the housing market could give new home constructions a boost.

Mortgage rates could rise

It doesn’t take much technical or fundamental analysis to deduce that U.S. mortgage rates will rise in 2017. The U.S. Federal Reserve finally succeeded in its plan to raise interest rates in December 2016 and it plans to increase the rates by three more quarter-percentage points this year. Increases in mortgage rates will one of the resultant effects of the fed rate hike.
Some of Trump's proposed economic policies could also push mortgage rates higher going forward. In fact, Michael Fratantoni, Chief Economist at the Mortgage Bankers Association observes that "Mortgage rates have continued to move higher in the post-election period, as investors worldwide are looking for increases in growth and inflation, with the 30-year mortgage rate reaching its highest weekly average since the beginning of 2016."

Homeowners could get improved access to credit

Nonetheless, the increase in mortgage rates would not necessarily make it harder for qualifying borrowers to get access to credit for their homes. In contrast, the increase in rates could make it much easier to access mortgage credit because volume applications for loans will reduce. In fact, you can reasonably expect lenders to start lowering their fees especially for first-time homebuyers in order to build up demand in the housing market.

Foreign buyers would invest more

Asian investors are moving their wealth to North America and Europe and a great deal of that wealth often ends up in the U.S. real estate market. In the last couple of year, home prices (especially for luxury properties) have been creeping up in markets such as Los Angeles and New York. One of the major drivers of the increase in home prices are buyers from India and China who are looking for safe haven for their wealth.

The Chinese economy is slowing down and Beijing is adopting a tougher stance against ostentatious wealth. In India, the Modi administration is waging a serious war on 'corruption' and a large number of wealthy Indians are caught in the crosshairs. Hence, it isn’t any surprising that Asian investors are stashing their wealth away in U.S. real estate markets in order to escape stifling financial policies.

By Nicholas Kitonyi

Copyright © 2016 Nicholas Kitonyi - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2016 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Catching a Falling Financial Knife