2017 Mortgage Trends and What They Mean for You!

2016 proved to be a great year for real estate with historic low interest rates and home sales up 12% from 2015. But what do mortgage experts expect in 2017? While we don’t know exactly what to expect from the mortgage industry in 2017, we do know one thing – change is coming.

1. Fewer Homes on the Market = More Competition

Markets will remain competitive while inventory is still low. The desire to sell is there, but the lack of inventory is a problem for sellers as well as buyers. An estimated 85% of home sellers would like to both buy and sell homes this year. But this is a great opportunity for first time buyers entering the market as sellers look to upgrade to larger homes.

Home construction will continue to grow in an attempt to keep up with demand.

2. Interest Rates are on the Rise, But don’t Panic

The Federal Reserve raised interest rates by 0.25% in December of 2016. And according to experts this may just be one of many hikes. However, the Federal Reserve rates do not always have a direct effect on interest rates. The National Association of Realtors projects that rates will be around 4.6% by the end of 2017.

For now, rates are still at record lows. Buy your home early in 2017 to take advantage of the low interest rates. Talking with your mortgage broker can also give you some insight into what options they may have for you.

3. Loan Standards May be Loosened

With new administration coming into office, 2017 should prove to be an interesting year for real estate. Experts speculate that Republicans may be looking to repeal the Dodd-Frank Act that was passed in response to the 2008 real estate crash. It created heavy regulation for many financial transactions that some believe went too far. Less loan regulation may allow more borrowers to qualify for a mortgage and could give homebuyers more loan options.

In addition to looser loan standards, Fannie Mae and Freddie Mac have raised conforming loan limits. This has been the first loan limit increase since 2006 and will allow more opportunities for consumers access to government loans. Loan limits can vary based on where you live and is based around the area median home value. Interested in learning more? Check out this video for more details on loan limits.

What Does this Mean for You?

  • Take advantage of early house hunting! January and February are generally the slowest months in real estate. By starting your house hunt early you can beat the Spring competition. With the expected rise in interest rates, early shopping can also allow you the opportunity to lock in lower interest rates.
  • If you plan to sell your home this year, make any necessary home improvements early. This will allow for a smoother transition when you start the selling process.
  • Get your finances in order before you begin the mortgage process. Your local mortgage broker can give you assistance on any questions you have on the mortgage process and may even grant you a pre-approval letter to further you negotiation power.

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