Although the majority of respondents believe now is a good time to buy a home, renters are feeling less optimistic.<\/p><\/blockquote>\n
NAR reports that 57 percent of renters say now is a good time to buy, down 3.0 percent from September and a whopping 11 percent from this time last year. Fully 78 percent of current homeowners say now is a good time to buy a home (unchanged from September, down 4.0 percent from December 2015).<\/p>\n
Affordability conditions are a downer<\/h2>\n
Lawrence Yun, NAR Chief Economist, says declining affordability in many parts of the country is behind the weakening morale.<\/p>\n
\u201cRents and home prices outpacing incomes and scant supply in the affordable price range has been a prominent headwind for many prospective buyers this year,\u201d he said.<\/p>\n
Yun added, \u201cMaking matters worse, the unwelcoming reality of higher mortgage rates since the election is likely further holding back confidence. Younger households, renters and those living in the costlier West region \u2013 where prices have soared in recent months \u2013 are the least optimistic about buying.\u201d<\/p><\/blockquote>\n
Looking into the crystal ball<\/h2>\n
Existing home sales are expected to close 2016 up 3.3 percent, and NAR projects they’ll rise 2.0 percent in 2017. The median home price increased 5.0 percent this year, with another 4.0 percent increase projected in 2017.<\/p>\n
Mortgage rates are expected to hit 4.6 by the end of next year, and most economists believe the Federal Reserve will raise rates this week, followed up by several more increases in 2017. NAR expects the rate to hit 1.25 next year.<\/p>\n
\u201cAlthough the economy is expected to continue to expand with around 2 million net new job creations, existing home sales are expected to see little expansion next year because of affordability tensions from rising mortgage rates and prices continuing to outpace income growth,\u201d said Yun.<\/p><\/blockquote>\n
Despite these headwinds, Yun is hopeful that the continued job growth, any economic stimulus from the new administration and more millennials reaching their prime buying years will keep demand for the most part on solid footing. The key will ultimately come down to what the housing market desperately needs: more inventory. However, more expensive mortgage rates could also slow the pace of homeowners listing their home for sale.<\/p>\n
\u201cSome would-be sellers may be reluctant to move up or trade down \u2013 especially if they\u2019ve refinanced in recent years,\u201d said Yun. \u201cThat\u2019s why it\u2019s extremely necessary for homebuilders to step-up their production of homes catered to buyers in the affordable price range. Otherwise the nation\u2019s low homeownership rate will struggle to shift higher in 2017.\u201d<\/p>\n
![\"2017](\"https:\/\/theamericangenius.com\/wp-content\/uploads\/2016\/12\/2017-Housing-Expectations-Infographic.jpg\")
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