St. Louis housing market prediction for 2017
ST LOUIS, MO/January 9, 2017 (STLRealEstate.News) The housing market had a good 2016, and is expected to have an even better 2017 in St. Louis and the greater active U.S. real estate hotbeds. The housing market has shown signs of strength recently, but momentum remains elusive. Will this be the year that housing breaks out? Experts vary in their answer, but most see an industry that will continue to grow while also posing challenges for new home-buyers.
For starters, people are already worried about mortgage rates loans after the post-election trend of sharply rising interest rates. Experts say this surge will end soon. The online real state brokerage Redfin predicts average interest rates for a 30-year fixed rate mortgage to stay below 4.3% in 2017, although rates were already there as of December 22, 2016 according to the St. Louis Fed. The National Associate of Realtors predicts a modest rise to 4.6% while Realtor.com predicts 4.5%.
We then come to the home supply dilemma. Markets were tight in 2016 as the home supply simply could not keep up with demand in St. Louis. The result was a sellers market, squeezing out a lot of buyers with higher than usual rates. Supply has been mostly on the rise since July, but is still in the 5.4% range as of October. The market is predicted to remain tight again through 2017.
And for home prices? Over the past three years, home prices have settled into a relatively steady pattern of approximately 5 to 6% annual gains. With interest rates finally rising over 4% and staying there while inventory continues to increase, price increases are likely to stay in check, in favor of the buyer. The result is a 2017 with few sharp pricing increases in the greater area of St. Louis.
Overall, as a St. Louis homeowner, you can expect gains in your home equity in 2017.
Contributing Editor: Alexandra R. Fasulo
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