What Will 2017 Bring to Housing?

The housing market enjoyed a strong 2016. What will the next twelve months bring for sellers and buyers? Much of the outlook is positive for housing, even as most experts predict some major changes that will affect mortgage rates.

Rate Hikes

Rising wages and economic growth have given the Federal Reserve reason to feel that the time is right to begin slowly raising interest rates to keep a lid on inflation. 2016 saw just one rate hike. Experts expect 2017 to see anywhere from one to three rate hikes, with WalletHub confidently predicting two rate hikes.

If the Federal Reserve does raise interest rates, it is likely to bring the target rate to between 1.00 and 1.25 percent. While, this is still historically low, it will increase mortgage interest rates.

Improved Credit Scores

2017 will see millions of people get a bump in their credit scores as foreclosures and short sales from the financial crisis fall off their credit reports.

WalletHub anticipates scores will rise from an average of 668 to 675.

When people see their credit scores improve, they are likely to want to get back into the housing market and make another home purchase.

Higher Home Sales

Everyone from WalletHub to the National Association of REALTORS expects 2017 to see an increase in home sales. Optimistic estimates of home sales vary between 5.52 million and 6 million homes in 2017. Part of the reason for the increased sales will actually be the Federal Reserve rate increases. As rates increase, banks will be loosening lending restrictions as higher rates mean lower risk for the banks. Also, many buyers will feel pressure to get into a home quickly because they will see low interest rates slipping away. If interest rates are raised slowly, the way the experts predict, it will help push more people into buying a home.

The increase in credit scores for millions of prospective buyers will also help fuel the increased sales on 2017.

Housing Prices Will Stabilize

Housing prices have remained high throughout much of the country due to a shortage of new houses. While more new construction is anticipated in 2017, it seems likely that there will not be enough new homes to bring prices down in 2017. However, even a slight improvement in housing inventory should be enough to help housing prices from getting much higher in much of the country. Prices will stabilize, but remain high.

So far, high housing prices has not stopped anxious homebuyers from making purchases. All of the numbers point to this trend continuing in 2017.

2017 looks to be another great year for the housing market. Changing economic conditions should all combine to help even more people buy a house in 2017.

Please see our Market Reports for a complete city by city analysis on the Marin County real estate market.

Behzad Zandinejad

Broker Associate

A Top Producing Agent for 2015 & 2016


Decker Bullock Sotheby’s International Realty

100 Tiburon Blvd, Mill Valley, CA.94941


[email protected]

Marin County Real Estate Report



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