Good News for 2017 Housing Market.
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Nearly 70 percent of Americans say now is a good time to buy a house, according to the results of Fannie Mae’s most recent National Housing Survey. The number of respondents who feel it’s the time to buy increased 5 percent from the month before and was one of many indicators showing positive progress from previous months. In fact, the number of participants who said now was a good time to sell a house also increased in February, reaching 45 percent of respondents.
Conservative growth expectations for 2017 persist as the markets continue to weigh the unfolding policies of the new Administration, according to the Fannie Mae Economic & Strategic Research (ESR) Group’s February 2017 Economic and Housing Outlook. The full-year economic growth forecast remains unchanged at 2.0 percent, slightly better than the 1.9 percent growth registered for all of 2016. Consumer confidence has increased, and with continued solid hiring and rising household net worth, consumer spending should strengthen growth. Despite relatively positive headline job gains last month, wage growth slowed and more people re-entered the labor market, conditions that support a gradual normalization of monetary policy. Mortgage rates have moderated slightly but remain 60 basis points higher than before the election. Still, leading indicators of home sales are encouraging with pending home sales rebounding and purchase mortgage applications holding up.
According to Doug Duncan Fannie Mae’s senior vice president and chief economist, the housing expansion will continue, although at a more moderate pace than last year given continued pressure on affordability. Depressed inventory, particularly in the more affordable segments, will likely constrain sales and push home price gains that outpace income growth. Higher mortgage rates might result in slower increases in house prices in the first quarter of 2017, but it will still remain a seller’s market in most of the country.
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