What does 2017 hold for the U.S. housing market? Zillow.com has released its forecast for the coming year and it looks like some noticeable shifts could be on the way.
- The home-ownership rate, which has been lower than normal, will rise as more and younger buyers enter the market. Many of them will be from varying ethnic backgrounds, meaning the ranks of homeowners will become more ethnically diverse.
- Economists and housing experts predict home values will grow by 3.6 percent next year, compared to the 4.8 percent growth seen so far in 2016.
- Expect the price of new homes to increase as builders have to pay more for labor. Especially if the Trump administration follows through with a crackdown on tougher immigration.
“There are pros and cons to both existing homes and new construction and the choice for home buyers can often be difficult,” said Svenja Gudell, Zillow’s chief economist.
“For those considering new construction in 2017, it’s worth considering the added cost that may come amidst ongoing construction labor shortages that could get worse if President-elect Trump follows through on his hard-line stances on immigration and immigrant labor. A shortage of construction workers as a result may force builders to pay higher wages, costs which are likely to get passed on to buyers in the form of higher new home prices.”
- Renting will become a little more affordable as incomes are expected to rise. Rent prices won’t grow as fast.
“Renters should have an easier time in 2017,” Gudell said. “Income growth and slowing rent appreciation will combine to make renting more affordable than it has been for the past two years.”