Home » News » Emerging Trends and Outlook for the US Real Estate Market 2017

The US real estate market seems to be growing stronger with increased demand and expanding residential construction activity. During April 2016, the national home price index (seasonally adjusted) rose up to 5%. Strong hikes in house prices were experienced by all the 20 major US cities. Portland saw the highest upsurge of 12.32%.

Again as per U.S. Census Bureau, the medium sales price of newly built homes increased by 1% to $290,400.

Emerging trends in US real estate market:

By the end of 2016, US real estate market is expected to see an inflow of more lenders, investors, service firms and users. It has become more dynamic, opening attractive doors to foreign investors as well.

  1. Construction of new homes is increasing

Despite slowing down of US economy as some metrics indicate, there is an increased market demand for new inventory. And home builders are putting all their efforts to meet this requirement.

As per NAHB (National Association of Home Builders), there has been a 2 points rise to 60 in builders’ confidence levels. And this level is expected to reach 67 in the coming 6 months. This confidence level is an important index on signifying that builders are ready to work on new construction projects.

Factors that will push these trends in positive direction for rest of the year are –

  • Firming labor market
  • Mortgage rates of historically low standards
  • Increase in household formations

Buyer’s interest –

Not that just builders are optimistic. Real estate buyers are also keen to purchase US assets, especially first-time consumers. Reports from NAR (National Association of Realtors) released that a share of 35% in the market is of new purchasers. As Mortgage reports say, “Purchasers are buying new homes in the US faster than builders building them.” The whole new homes stock is going to be sold out in the next 4.3 months. That is, by the start of 2017, all new homes are expected to be sold.

This emerging trend signifies, if you want to purchase a home at an affordable price, you have to do it before the year end.

  1. Unemployment dropped by 5%

Presently, the US economy has expanded more employment opportunities adding around 255,000 jobs in 2016. Development in this sphere means increased wages and salaries. People will have more buying power. So, this is a good indicator for increased number of buyers entering the housing market. In fact, in the previous year, the rate of unemployment has dropped by 5% in the US.

  1. Millennial show a different scenario:

However, despite having the capability to afford, millennials are not much encouraging this idea of purchasing homes now. Some of them don’t have enough money to make down payment; others prefer comforts of their respective homes. As per the study, around 1/3rd of these millennials in the US are living with their parents.

So, how this trend is going to affect the real estate market in the coming years is a matter of concern.

  1. Hawaii is the hot-spot

While the best place having a healthy real estate market in the US is easy to locate on a map, Hawaii is the current hot-spot for home sales. The demand is such that if interest rates hike a bit inch, that won’t be too bad, stated a local realtor.

As of now, the market is quite healthy, despite each one being different in the United States. They are all moving in the similar direction. However, with a rise in interest rates, the changes in the above factors have to be monitored. 2017 is going to be a big year in the every aspect, with the new president entering the Oval Office.