What to Expect with Savannah’s Housing Market in 2017

Posted: January 25, 2017

A New Year is here and it’s time to take a look at what the housing market forecast shows for 2017. Buyers always want to know what to expect when a new year comes. Whether you’re planning to buy or sell in Savannah, this year, it’s important to look at a few key factors first.

While there’s no way to completely predict what the market will do in 2017, there are some things that can help us see what we might be in store for. Here’s a look at the forecast for the housing market this year.

Interest Rates on the Rise

interest-rate-hikesSince we have already seen the federal funds interest rates rise, its likely interest rates for 2017 will experience a couple more hikes. Those with ARM or adjustable rate mortgages will take a hit. Any type of home loan tied to the prime rate will see a hike, but it won’t be noticeable in most cases.

Even with the rate hike in December, interest rates are still historically low. You may want to act quickly if you plan to purchase a home, but don’t let the potential of another rate hike scare you off. This won’t have an impact on some buyers, but those on a tighter budget may need to purchase sooner or they may see higher monthly payments and lower loan amounts.

According to the National Association of Home Builders, if mortgage interest rates go from 4% to 4.25%, about 965,000 potential buyers will no longer be a part of the buying pool across the United States. However, the rate hike can be mitigated by shopping for a lower-priced home, saving a larger down payment or choosing a fixed-rate mortgage with a longer term.

Home Prices Still on the Rise

Experts don’t see home prices rising as much as they did in 2016, but they still expect to see about 3.5% higher home prices by the end of 2017. Some believe smaller homes will see faster rises in home prices, while larger homes will not rise nearly as fast. Competition is expected when it comes to smaller homes, especially those on the lower side of the pricing spectrum.

Lower Inventories Cause the Prices to Rise

buying-a-home-2017The major reason home prices are expected to rise and have risen in the past year is the lower inventory of home. It doesn’t help that new construction has also been lacking across the country. However, the National Association of Home Builders/Wells Fargo Hosting Market Index was at its highest in December since the summer of 2005. This means, there is more confidence in homebuilders to start building more homes, which is good news for home buyers.

What Does it All Mean?

When looking at the key factors for the Savannah housing market for 2017, it can be a bit confusing. With the expectation of a couple of interest rate hikes, prices going up about 3.5% and inventory remaining lower, it’s expected that the market will continue to strengthen. However, it all depends on many other factors, as well.

housing-market-2017A new president in office could have some effect on the market, especially if President-elect Trump creates new jobs as he has promised. There is still quite a bit to consider and plenty of factors that could turn the 2017 housing market one way or another. However, most believe it’s going to remain stable and continue to push forward through at least the first half of the year.

Those with tighter budgets may want to find a home earlier in the year as the potential interest rate hikes will affect these buyers the most. If you don’t find a home before the hike, you may be shopping for a lower-priced home or waiting until you can afford to put more money down.