Millennials and the baby boomer population will be demographics to watch in the new year, as the housing decisions they make will increase demand for the next 10 years, according to the 2017 National Housing Forecast report from Realtor.com which details the top housing trends and 100 largest metropolitan markets to watch.
A demographic that is known for benefiting greatly from low mortgage rates, the millennial market’s share of the buyer population has decreased to 33 percent due to the increase in interest rates. Baby boomers take up 30 percent of the buyers’ market and are expected to be more successful in closing sales.
Home price appreciation is set to slow down to 3.9 percent growth year-over-year after an estimated appreciation rate of4.9 percent in 2016. However, 26 markets will see price acceleration of 1 percentage point growth or more. Greensboro-High Point, North Carolina; Akron, Ohio; and Baltimore-Columbia-Towson, Maryland will encounter the largest increases in price appreciation.
The combination of sparse housing inventory and strong demand was the cause of increased home prices in 2016, according to Realtor.com. The lack of home inventory, which is currently down an average of 11 percent in the top 10 metropolitan areas in the United States, is expected to remain constant in 2017. The current median age of inventory is at 68 days, which is a 14 percent increase than the national average.
West coast cities are expected to lead the nation in home prices and sales with increases of 5.8 percent and 4.7 percent, respectively. Six out of the top 10 cities listed in Realtor.com’s 2017 top 100 metro housing markets list are located on the west coast. The top 10 housing markets are: 1) Phoenix-Mesa-Scottsdale, Arizona; 2) Los Angeles-Long-Beach-Anaheim, California; 3) Boston-Cambridge-Newton, Massachusetts-New Hampshire; 4) Sacramento-Roseville-Arden-Arcade, California; 5) Riverside-San Bernardino-Ontario; 6) Jacksonville, Florida; 7) Orlando-Kissimmee-Sanford, Florida; 8) Raleigh, North Carolina; 9) Tucson, Arizona; and 10) Portland-Vancouver-Hillsboro, Oregon-Washington.
To read the full report, click here.