New Home Sales Predicted to Rise
10 Percent in 2017
New Home Starts Anticipated to Increase 3 Percent
New home sales are forecast to expand by 10 percent, while new home starts are expected to grow 3 percent, according to Realtor.com and its forecast of the overall housing market in 2017.
Home prices should grow 3.9 percent, and existing home sales are forecast to increase 1.9 percent to 5.46 million homes, Realtor.com said. The homeownership rate should stabilize at 63.5 percent, after being at 62.9 percent in 2016.
Realtor.com has also forecast GDP growth of 2.1 percent, a 2.5 percent hike in the consumer price index and unemployment declining to 4.7 percent by the end of 2017.
"We don't expect the outcome of the election to have a direct impact on the health of the housing market or economy as we close out 2016." said Jonathan Smoke, chief economist for Realtor.com. "However, the 40 basis points increase in rates in the days following the election has caused us to increase our interest rate prediction for next year. With more than 95 percent of first-time homebuyers dependent on financing their home purchase, and a majority of first-time buyers reporting one or more financial challenges, the uptick we've already seen may price some first-timers out of the market."