As always, a new year means changes are likely coming to the housing market. This year, there’s an even bigger question mark—sweeping changes in the government, including the election of a new president—that could impact 2017 real estate in all kinds of different ways. So, if you’re thinking about buying a home in 2017, here’s what you need to know.
The new president effect
There’s no way to predict with complete certainly what a new president’s effect on the real estate market will be. Housing wasn’t a major topic of discussion during the 2016 campaign, but a number of other policies could have a major impact on it. As with any large change in government, you can count on some economic turbulence ahead, but it’s not all bad news. Expect a stimulus to the economy, at least in the short term.
As Forbes pointed out, a combination of tax cuts and increased government spending on infrastructure and national defense will no doubt give the economy a boost during the first half of 2017, which could be good news for home buyers. The other side of this coin is that increased GDP is likely to cause inflation, which could lead to mortgage interest rates climbing a bit as the year goes on. Bottom line: If you’re planning to buy a house this year, it’s better to do it sooner rather than later.
The Obama administration enacted the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010, which was intended to protect mortgage borrowers from predatory lending practices. Changes to the this legislation will almost certainly occur in some form in 2017, which could make home loans more readily available to certain buyers, especially those seeking loans from smaller banks.
Ongoing housing shortage
New construction of single-family homes increased by 9% in 2016. That’s a pretty low number, but it could get even smaller in 2017. As The Simple Dollar reported, approximately 1 in 4 construction workers are foreign-born. That means stricter immigration policies could cause a labor shortage that may drive new home construction down to 6%. Less new home construction means fewer new homes on the market, which could drive up the prices of existing homes as 2017 goes on.
A new year and a new President of the United States means a shakeup in the housing market is a near certainty. If you plan on buying a new home in 2017, the first half of the year is probably the best time to invest. For more information on real estate trends and finding your new home in Austin, Texas, contact Clark Wilson Builder today.