What 5 housing market experts are watching in 2017

2016 was a good year for housing. Interest rates hovered near historic lows until December. In November sales of existing homes were at their highest rate since February 2007. The question is, will these trends continue? We surveyed economists, mortgage experts, and media voices about their expectations for the housing market in 2017. This is what we heard:
Ken HarneyKenneth R. Harney, nationally syndicated real estate columnist, Washington Post Writers Group

Some changes promised by the new administration could really “juice up the economy,” says Ken Harney. “If lawmakers quickly get a new tax plan through that assures moderate tax levels for most people, bring back billions of dollars from overseas for infrastructure, increase employment, loosen regulations – that’s combustible! All that will be good for economic growth.”

Douglas G. DuncanDouglas G. Duncan, senior vice president and chief economist, Fannie Mae

The Fed has finally increased interest rates, and while Doug Duncan does not expect housing prices to decline outright, the rate increases will probably slow down the housing market. “The real variable,” Duncan says, “is if interest rates go up 100 basis points and stay there, we would then expect home sales to decline.” Of course, with the policy proposals that may come from the new administration, there’s still a level of uncertainty, Duncan adds.

Joseph NeryJoseph Nery, attorney; 2016 president of NAHREP (National Association of Hispanic Real Estate Professionals); and principal, Nery & Richardson LLC

Real Estate Attorney Joe Nery fielded many phone calls after the November election from concerned Hispanic consumers in the middle of the contract process. NAHREP is assuring homebuyers that you don’t have to be a citizen or permanent resident to own property in the U.S.

Nela RichardsonNela Richardson, chief economist, Redfin

Last summer homeownership dropped to a 50-year low, rebounding a bit in the fall, says Nela Richardson. But with Millennials starting to age into the starter-home-seeking bracket, there’s a huge opportunity. “Going into 2017 we’re on really good footing,” she says. Political factors could be the game changer, making the housing market vulnerable or housing healthy and strong, she says.

Jonathan SmokeJonathan Smoke, chief economist, Realtor.com

While the increase in interest rates can put off buyers and slow down the pace of sales, it can also have the reverse effect. Says Jonathan Smoke, “Usually the initial reaction by consumers, as they become aware of rates moving up, is more urgency — moving plans forward, acting instead of putting off.”

All views expressed in this article are the individual’s own and do not reflect the views of Fannie Mae or its management. Estimates, forecasts and other views expressed in this article should not be construed as indicating Fannie Mae’s expected results, are based on a number of assumptions and may change without notice. How this information affects Fannie Mae will depend on many factors. Neither Fannie Mae nor its Economic & Strategic Research (ESR) Group guarantees that the information in this article is accurate, current or suitable for any particular purpose. Changes in the assumptions or underlying information could produce materially different results. The ESR Group’s views expressed in this article speak only as of the date indicated.


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