Houston, Texas Housing Market Forecast 2017

Home prices in Houston, Texas have never been higher than they are right now, and there’s a chance they’ll rise even higher during 2017. That’s the Houston housing market forecast for 2017, according to a number of real estate analysts, economists, and industry leaders.

Related: Marketing support for Houston mortgage brokers

Houston Housing Market ‘Sprinting Toward 2016 Finish’

In a December 2016 press release, the Houston Association of Realtors (HAR) reported that the median price for a single-family home in the city rose by 8.3% in November, compared to a year earlier. The median climbed to $222,000 last month, reaching its highest point ever (even higher than the last housing bubble). The average price for homes in Houston rose to $281,671 in November, a year-over-year gain of 7.2%.

“It looks like the Houston real estate market is sprinting toward the 2016 finish line, based on the solid numbers in November’s report,” said HAR Chairman Mario Arriaga. “The market has shown tremendous resilience throughout the year in the midst of a struggling energy sector…”

Real Estate Forecast for 2017: Prices Rising More Slowly?

More inventory is coming onto the market, and this could slow the rate of home-price appreciation as we head into 2017. That’s the general forecast for Houston’s housing market in 2017.

Based on current construction trends, many real estate professionals expect the number of homes for sale to increase in 2017 as new inventory comes onto the market.

Mary Piper, director of relocation and operations with Bernstein Realty told the Houston Chronicle: “We feel that the inventory of homes will continue to increase after the new year, with both the election and holiday season behind us.”

HAR also cited inventory gains in its latest market report, saying that home sales were up due to “more plentiful inventory” in the area.

Due to the increased inventory, home prices in Houston could rise more slowly in 2017 than they did in 2016. Rising mortgage rates could also have a cooling effect on the local real estate market next year.

Houston Mortgage Rates Rise Sharply at Year’s End

Houston, we have lift off! Mortgage rates shot up like a rocket in November and December of 2016, reaching their highest level in two years. According to the weekly survey conducted by Freddie Mac, the average rate for a 30-year fixed home loan rose to 4.16% during the week ending on December 15, 2016.

mortgage rate chart 2016
Mortgage rate trends during 2016. Source: Freddie Mac.

The chart above, courtesy of Freddie Mac, shows mortgage rate trends during 2016. You can see the November-December surge on the far right side. So here’s another forecast for the Houston housing market in 2017: Mortgage loans will be more expensive next year.

Looking forward, the Mortgage Bankers Association recently forecast a continued, yet gradual, rise in rates through the end of 2017. In December 2016, the industry group issued the following forecast for the average 30-year mortgage rate:

  • Q1 2017: 4.3%
  • Q2 2017: 4.4%
  • Q3 2017: 4.6%
  • Q4 2017: 4.7%

Granted, this is just a prediction based on current market trends. So you probably shouldn’t “bank” on it. But it does underscore an important point. Both home prices and mortgage rates are expected to continue rising next year.

So home buyers who postpone their purchases until later in 2017 could end up paying more for a house, and for a loan. It’s worth considering.

Higher Loan Limits for Conforming, FHA and VA

Here’s some good news for home buyers and mortgage shoppers. Houston, Texas will see higher loan limits in 2017, for conforming, FHA and VA mortgage loans.

According to a November 2016 announcement from the Federal Housing Finance Agency, the conforming loan limit for a single-family home purchase in Texas will rise from $417,000 in 2016 to $424,100 in 2017. VA loan limits are aligned with the conforming caps, so they’ll also rise to $424,100 next year. FHA loan limits will increase slightly to $331,200.

These changes were made in response to home price gains that occurred during 2016, since loan limits are based on house values.

Disclaimer: This story includes predictions and forecasts for the Houston real estate market in 2017. Such statements are the equivalent of an educated guess. No one can predict future housing conditions with complete accuracy. The Home Buying Institute makes no claims, guarantees or assertions about the Houston, Texas housing market in 2017.

2016 Mortgage Rate Chart Shows Big Surge

On Thursday, December 15, Freddie Mac reported that mortgage rates rose again in their latest industry survey. But that’s just the tip of the iceberg. As shown in the 2016 mortgage rate chart below, home loan rates in three categories have risen for the last seven weeks in a row and are now at their highest point of the year.

If that weren’t enough to light a fire under would-be home buyers, the Federal Reserve recently announced that it would increase the short-term federal funds rate for only the second time in a decade. Indirectly, this could lead to even higher lending rates in 2017. Borrower beware.

Mortgage Rate Chart Shows Late 2016 Surge

Freddie Mac published the 2016 mortgage rate chart shown below earlier today, along with the results of their latest weekly survey of the mortgage industry.

mortgage rate chart 2016
Mortgage rate chart for 2016. Source: Freddie Mac PMMS

If a picture is worth a thousand words, then this chart speaks volumes. A couple of things will jump out at you right away. The first is the large spike in mortgage rates, shown on the right side of the chart. That surge took place over a six-week period that began in mid-November. You’ll also notice that rates are higher today than they were at the start of 2016.

Mortgage rate chart fast facts:

  • The average rate for a 30-year fixed mortgage loan rose three basis points (0.03%) this week to land at 4.16%. That’s the highest it has been since October 2014.
  • It bears repeating: 30-year mortgage rates haven’t been this high in over two years.
  • The average rate for a 15-year fixed home loan rose to 3.37% this week. It is also at its highest point of the year.
  • Borrowers paid an average of 0.5 points (a.k.a. discount points) in order to secure these rates. This is a common strategy used to reduce total borrowing costs over time.

Not surprisingly, the Mortgage Bankers Association reported a drop in home loan applications yesterday. According to their data, total application volume declined by 4% (on a seasonally adjusted basis) last week from the previous week. Clearly, this “new normal” for mortgage rates is pricing some buyers out of the market, and closing the window of savings for homeowners who are trying to refinance.

As we enter 2017, the mortgage industry will have to adjust to the effects of rising rates shown in the chart above.

Rising Home Prices Add to the Urgency

Surely, home buyers are feeling a sense of urgency right about now. The recent surge in mortgage rates has caught everyone’s attention, lenders and borrowers alike. But that’s not the only concern for buyers. Rising home values are creating a “double whammy” situation by further reducing affordability.

In most cities across the country, home prices rose steadily over the last year. And they’re expected to rise further in 2017, though possibly at a slower pace. According to the real estate data company Zillow, home prices nationwide rose by 6.2% during 2016. Looking forward, the company’s economists expect house values to rise by around 3% in 2017.

The message to home buyers is clear: You might want to think about buying sooner, rather than later.

Disclaimer: This story includes a 2016 mortgage rate chart provided by Freddie Mac. This chart shows averages based on a survey of about 125 lenders across the country. Individual loan rates vary based on a variety of factors, including borrower credit scores, the type of loan being used, etc.

Phoenix, Arizona Real Estate Market Forecast for 2017

Home values in Phoenix rose steadily and sharply in 2016, climbing 9% to 11% depending on the source. But 2017 forecasts for the Phoenix housing market suggest that prices could rise more slowly over the next year or so.

In a somewhat contradicting report, the National Association of Realtors made a prediction that Phoenix would be the hottest real estate market in the country in 2017.

Phoenix Housing Market Forecast for 2017

According to the real estate data company Zillow, home prices in Phoenix, Arizona rose by 9.4% from December 2015 to December 2016. This is based on their own proprietary method for measuring median home values.

Be number one

By contrast, house prices nationwide rose by around 6% in 2016. So by this measurement, the Phoenix real estate market outpaced the nation in terms of home-price appreciation.

But what about next year? What’s the forecast for the Phoenix housing market in 2017? According to the research team at Zillow, home prices in the city will rise by around 3.7% during 2017. While that’s a lower level of appreciation than 2016, it’s still a healthy (and historically normal) year-over-year increase.

The economists at realtor.com® have a somewhat different view. They don’t think the Phoenix real estate market will slow down that much in 2017. In fact, they recently predicted that it will be the #1 housing market in the country in 2017, in a ranking that looked at 100 metro areas nationwide. The company’s economists expect home prices in Phoenix to rise by 5.9% next year, with a 7.2% increase in home sales (year over year).

Here’s a snapshot of their top housing markets list for 2017:

Hottest housing markets 2017
Top 10 housing markets of 2017. Source: realtor.com.

So what’s behind the top-ranked forecast for the Phoenix real estate market in 2017? What market factors are driving these predictions? Inventory has a lot to do with it. Or rather, the lack of inventory.

There is currently a lot of demand for housing in Phoenix, Arizona, particularly among retiring baby boomers who often relocate to the area. But there’s not enough inventory to satisfy the current level of demand, and this is pushing home prices north.

Buying a Home Now Versus Later

While home prices might rise more slowly in 2017 than they did this year, they are still predicted to rise steadily throughout the year. And that’s the key takeaway here, from a home-buying perspective. Forget about all of the “hottest housing market” rankings for a moment. The bottom line is that Phoenix home buyers who postpone their purchases until later in 2017 will likely pay more for a house.

Granted, you should never buy a home until you’re financially and emotionally ready for it. At the same time, you have to keep an eye on market trends. And the market is clearly trending upward right now.

Mortgage Rates on the Rise

Mortgage rates shot up over the last few weeks, and they’re expected to continue rising gradually throughout 2017. This is another important housing forecast for Phoenix home buyers, because it impacts buying power. Here are the latest trends on the mortgage front.

If a picture is worth a thousand words, the following chart speaks volumes. This chart accompanied the latest release of Freddie Mac’s weekly survey of the mortgage market. The big spike on the far-right side represents the last few weeks. As you can see, mortgage rates have risen sharply recently.

Mortgage rate trends December
Mortgage rate trends through December 8, 2016. Source: Freddie Mac.

Looking forward, both Freddie Mac and the Mortgage Bankers Association have predicted that rates will rise gradually during 2017. Granted, we probably won’t see any more big spikes like this one. But mortgage rates could inch upward over the next 12 months. That’s the forecast being offered by industry watchers, and it’s another important point to consider when planning to buy a home.

Disclaimer: This story contains predictions and forecasts for the Phoenix, Arizona real estate market in 2017. Data and projections were compiled from third-party sources not associated with our company. We have presented them here as an educational service to our readers.

FHA Changes: Higher Loan Limits for 2017

On December 1, 2016, the Department of Housing and Urban Development (HUD) announced the revised FHA loan limits for 2017.

The maximum loan limits for purchase mortgages were increased in most counties across the U.S., and will remained unchanged in some counties. There were no counties with a decrease. Next year, FHA loan limits for a single-family home will range from $275,665 to $636,150. Those are the “floor” and “ceiling” amounts.

Visit FHAhandbook.com for a full list of FHA loan limits by county.

Fast Facts: 2017 FHA Loan Limit Changes

Here’s an overview of the recent changes to FHA loan limits, effective in 2017.

  • FHA loan limits vary by county, and they are partly based on the conforming caps established by the Federal Housing Finance Agency (FHFA). For instance, FHA’s minimum national loan limit “floor” for low-cost areas is typically set at 65% of the national conforming amount for the U.S.
  • For most counties across the country, the 2017 FHA loan limit for a single-family home mortgage will be $275,665. This is what HUD refers to as the “floor.”
  • In more expensive real estate markets (such as San Francisco, New York City, and the Washington, D.C. metro area), the single-family FHA loan limit can be as high as $636,150. This is the “ceiling.”
  • There is obviously a broad spectrum between the floor and ceiling figures mentioned above. For these “in-between” counties, FHA loan limits can vary widely as a result of variances in home prices. (You can use the FHAhandbook.com link provided above to find the caps for your county.)
  • Within each county, there are higher limits for multi-family properties, such as duplex and triplex units.
  • The FHA limit changes mentioned above will apply to mortgage loans with case numbers assigned on or after January 1, 2017. They will remain in effect until the end of that year. (They are reviewed and reconsidered every year.)
  • Though they are technically set at the county level, both conforming and FHA loan limits are generally the same across entire metropolitan areas. For instance, there is a single limit for the entire Seattle metro area, even though it encompasses three separate counties.

A Response to Rising Home Prices

These FHA changes are a direct result of rising home values across the U.S. As mentioned above, the Federal Housing Administration’s loan limits are based on the conforming caps set by the Federal Housing Finance Agency. The FHFA, in turn, bases its limits on median home prices.

So when home values rise significantly during the course of a year, we often see a corresponding change with both FHA and conforming loan limits.

This is exactly what occurred during 2016. According to the real estate information company Zillow, home prices across the U.S. rose by more than 6% from December 2015 to December 2016. During the same 12-month period, double-digit gains were reported in red-hot real estate markets like Dallas (19%), Portland (17%), and Seattle (14%).

In short, these 2017 FHA changes are a result of higher housing costs.

Helping Home Buyers Since the 1930s

The Federal Housing Administration’s loan program was established by the National Housing Act of 1934. It was part of President Franklin D. Roosevelt’s “New Deal” program, established during the Great Depression. The goal was to make housing and mortgage loans more affordable to Americans, particularly those of low to moderate incomes.

The FHA loan program is unique in that it provides federal insurance for home loans made within the private sector. Mortgage lenders who participate in the program receive insurance protection against borrower default, as long as they meet certain lending criteria.

As a result of this government backing, FHA lenders are often more lenient with their qualification criteria for borrowers (credit scores, debt ratios, etc.).

Aside from loan limits, HUD has not announced any other major changes to the FHA program for 2017. Nor do we expect any. The minimum down payment for an FHA-insured mortgage loan will likely remain at 3.5% through the end of 2017, where it has been for the last few years.

Los Angeles Housing Market Forecast 2017: Home Prices Leveling

Home prices in Los Angeles, California have risen steadily — and significantly — over the last couple of years. But that might begin to change in the months ahead. Recent forecasts for the Los Angeles housing market suggest that prices could rise more slowly in 2017, compared to this year and last.

Los Angeles Housing Market Forecast for 2017

There has been a lot of talk lately that housing markets across California are reaching peak levels, in terms of affordability. As a result, market forecasts for 2017 are more conservative than in the past.

This is true for the Los Angeles real estate market as well. Recent predictions and forecasts from housing analysts suggest that L.A. home prices will slow down in 2017.

Take Zillow for example. The economists at the real estate information company recently predicted that Los Angeles home values will rise by a mere 1.7% over the next 12 months (through November 2017). That’s a much slower rate of appreciation than what we’ve seen during 2015 and 2016.

According to Zillow: “The median home value in Los Angeles is $590,400 … home values have gone up 7.3% over the past year and Zillow predicts they will rise 1.7% within the next year.”

This reflects the housing market forecasts being issued for many California cities. Across the Golden State, real estate markets are expected to cool down to some degree in 2017. Pick a city, any city, and chances are the 2017 home-price forecast is a fraction of the previous year’s gains.

Will Slowing Home Prices Silence the “Bubble” Talk?

The 2017 forecast for the Los Angeles housing market suggests that home values will rise more slowly over the next year. But that’s not necessarily a bad thing. In fact, it would ease concerns of a real estate price bubble.

At the end of 2015, Zillow surveyed dozens of economists and housing analysts about home price trends in the United States. According to the report accompanying that survey: “Ten or more experts think there’s a risk that Boston, Los Angeles or Miami will enter a [price] bubble in the next three years.”

That was in December 2015, and home prices in Los Angeles have risen steadily since then. A continuation of those rapid gains could, in fact, lead to a bubble scenario. But it doesn’t appear likely at this point. If recent predictions for the the Los Angeles real estate market prove true, and prices do in fact slow down considerably, then it would give the market a chance to “normalize” and wages a chance to catch up.

Mortgage Rates on the Rise

At the end of last year, mortgage industry analysts predicted that mortgage rates would rise steadily during 2016. They were wrong for the most part — until now. Thus far in November 2016, mortgage rates have been on a steady rise. Last week, the average rate for a 30-year fixed home loan shot up by nearly 40 basis points (0.40%). See chart below.

Freddie Mac rate chart, Nov
Mortgage rate trends to date. Source: Freddie Mac.

We expect the threat of rising rates to spur the Los Angeles housing market in 2017, particularly among home buyers. We will likely see a slowdown during the end-of-year holiday seasons, like always. But when the new calendars go onto the walls, a lot of L.A. home buyers will scramble to make their purchases before rates climb higher. We’ve been lulled by low mortgage rates for a long time. The latest spike, shown in the chart above, will serve as a wake-up call — and a call to action.

Disclaimer: This story contains predictions and forecasts for the Los Angeles real estate market in 2017. Such statements were compiled from third-party sources not associated with our company. We have presented them here as a service to our readers. The Home Buying Institute makes no claims or assertions about future housing market conditions in Los Angeles or elsewhere.

Opinion: How a Donald Trump Presidency Could Destabilize the Housing Market

The Home Buying Institute is encouraging its readers to steer clear of Donald Trump on election day. We feel that his “business” practices and philosophies could spawn policies that would have a destabilizing affect on the U.S. housing market.

Let’s go straight to the source. In 2006, before the last housing collapse, Trump stated: “I sort of hope that happens [the housing bubble bursts] because then people like me would go in and buy.”

These are dangerous qualities to have in an elected leader with such influence and power. Do we want a president who clearly only cares about himself?

Donald Trump Bad for the Housing Market?

Let’s be clear. Presidents don’t control the housing market. But they do have the authority to enact policies than can affect the housing market — for better or worse.

As voters, we cannot predict the future. We cannot say, with certainty, how a Hillary Clinton or Donald Trump presidency would affect the housing market. The best we can do is try to understand their views on such matters. And no one has made his housing-related views more clear than Donald Trump.

During the first presidential debate, on September 26, Hillary Clinton said that Donald Trump was “one of the people who rooted for the housing crisis. He said back in 2006, ‘Gee, I hope it does collapse because then I can go in and buy some and make some money.’ ”

Turns out, she was right. While Trump’s wording was slightly different, he said this just a couple of years before the housing market collapsed.

A man interviewing Trump for an audiobook asked him about the “pessimism” people had about a real estate bubble and its likelihood of bursting. To which Trump responded:

“Well first of all, I sort of hope that happens because then people like me would go in and buy. You know, if you’re in a good cash position — which I’m in a good cash position today — then people like me would go in and buy like crazy … If there is a bubble burst, as they call it, you know, you can make a lot of money.”

This isn’t speculation or part of some media “conspiracy.” These are Donald Trump’s personal views about the U.S. housing market, spoken in his own words. Watch the video below for an audio recording of Trump explaining his desire for a housing collapse.

He has made similar comments on other occasions. In fact, he practically bragged about it during one of the presidential debates. When Hillary Clinton called him out for wanting to capitalize on a housing collapse (despite the financial damage it did to millions of people), Trump replied by saying:

“That’s called business, by the way.”

Clinton followed up by saying five million people lost their jobs, and $13 trillion in family wealth was wiped out (by the housing crisis and ensuing recession). Trump appeared to shrug off these numbers, because it didn’t happen to him.

Rational people who care about the stability of the U.S. economy should be horrified at the thought of a Trump presidency.

In It for Himself

There is nothing illegal about buying depreciated assets after a financial calamity, in order to make money. It’s an investment strategy (of questionable ethics). That’s not the issue we have, as real estate educators.

What’s worrying to us is the fact that Trump doesn’t seem to care about the stability of the U.S. housing market, or the fact that millions of people lost their homes during the housing crash. He doesn’t seem to care that the housing crash took the national economy down with it, leading to the most severe downturn since the Great Depression.

As long as Donald Trump comes out on top, none of these things are his concern.

In a president, this kind of sentiment could be disastrous. A president, for example, could enact policies that destabilize the housing market. A president that views the United States residential real estate market as a financial instrument to be used for personal gain, while ignoring the impact it has on other people’s lives, is a dangerous president.

That is why we strongly discourage our readers from voting for Trump.

Analysts Predict Mortgage Rates Will Rise in 2017, but Gradually

We’re halfway through October, with the end of the year right around the corner. That means a lot of would-be home buyers are looking ahead to 2017. And many of them have the same question: Will mortgage rates rise during 2017, and if so by how much?

Unfortunately, nobody can predict future mortgage-rate trends with complete accuracy. But that doesn’t stop economists and housing analysts from making predictions. The general consensus among many industry-watchers is that mortgage rates will rise in 2017, but gradually.

Rising Mortgage Rates in 2017?

Reuters recently published the results of a survey of mortgage industry analysts. According to the survey respondents, the average rate for a 30-year fixed mortgage loan is expected to rise gradually in 2017. Thirty-year rates are currently hovering just below 3.5%, according to the latest Freddie Mac market survey published last week. They are expected to climb to an average of 4.08% in 2017, and 4.60% in 2018.

“The tighter U.S. labor market will lead to stronger wage income growth over the coming year. Combined with still-low mortgage rates, income growth will lead to stronger purchase demand,” said Andres Carbacho-Burgos, an analyst for Moody’s Analytics.

So, what factors might lead to rising mortgage rates in 2017? The Federal Reserve’s monetary policy plays a role. Fed officials will meet on November 1, 2016, for one of their regularly scheduled policy discussions. They’ll meet again at the end of December. Many analysts believe the Fed will raise the short-term federal funds rate after their December meeting.

The funds rate is used by banks when transferring money among themselves. While it doesn’t affect mortgage rates directly, it can have an indirect influence by shifting investor demand. In short, when the federal funds rate goes up, mortgage interest rates tend to rise as well. And a growing chorus of voices is predicting this exact scenario as we move into 2017.

MBA Also Expects Rising Rates

A recent forecast from the Mortgage Bankers Association (MBA) also predicted a gradual rise in home loan rates during 2017. Economists at the MBA anticipate that the average rate for a 30-year mortgage loan will rise to 3.7% by the end of this year, and continue inching upward throughout 2017.

Here is their latest forecast for 30-year home loans, issued in September:

  • Q1 2017: 3.9%
  • Q2 2017: 4.1%
  • Q3 2017: 4.3%
  • Q4 2017: 4.4%

But let’s not forget that the MBA made a similar forecast at the end of last year, which didn’t pan out. In December 2015, they predicted that the average rate for a 30-year fixed home loan would rise to 4.8% by the end of 2016. But that doesn’t seem likely, since the current average is around 3.47% (according to Freddie Mac). So you have to view these mortgage rate forecasts for what they are — an educated guess.

The key takeaway here is that most analysts and economists expect mortgage rates to rise gradually, and slightly, during 2017. As a result, home buyers who postpone their purchases until later next year might end up paying more interest on their loans. It’s just another point to consider when laying out your home-buying plans.

Disclaimer: This article contains forward-looking statements from third parties not associated with the Home Buying Institute. We make no claims or assertions about mortgage trends in 2017.

5 U.S. Housing Market Forecasts and Predictions for 2017

It’s October, and at the Home Buying Institute that means it’s time to round up housing market forecasts and predictions for the upcoming year.

“Cooling” seems to be the key word for 2017. Many analysts and economists expect the residential real estate market to cool down over the next 12 months, in terms of both competition and home-price appreciation.

Here are five more U.S. housing market forecasts for 2017.

5 Housing Market Predictions for 2017

Housing markets in a handful of metro areas will continue to sizzle in 2017, while the rest of the country could experience a cooling trend. Mortgage rates will likely hover in the 3.5% range for the short term, but could rise above 4% through the first half of 2017. Loan limits could also rise in some parts of the country next year, in response to rising home values.

Let’s take a closer look at these and other housing market forecasts and predictions for 2017.

1. Home prices nationwide to rise 3% – 5% over next 12 months.

In October, the economic research team at Zillow issued this 12-month forecast for the U.S. housing market: “United States home values have gone up 5.1% over the past year and Zillow predicts they will rise 2.7% within the next year [through October 2017].”

The widely cited CoreLogic HPI Forecast suggests that house prices in the U.S. will rise by 5.3%, year over year, from August 2016 to August 2017.

The Zillow prediction extends through October, while the HPI Forecast looks out to September of next year. Additionally, the two companies use different data models to make their projections. Hence, the different estimates.

Of course, these are national forecasts for the U.S. housing market as a whole. At the local level, we expect to see a broad spectrum of price increases (and, in some cases, price declines) over the next 12 to 14 months. Which brings us to housing market prediction #2.

2. California’s red-hot housing markets will cool significantly.

Many California cities experienced tremendous price growth over the last few years. But that’s beginning to change. Housing markets across the Golden State are slowing down, as demand softens. Affordability is an issue in many of these markets. Buying a home has become cost-prohibitive in many parts of the state, for the majority of residents. Some residents are leaving the state because of it.

Housing markets across California are undergoing a shift. It’s not a buyer’s market yet, but it’s not the strong seller’s market of years past either. Home prices are leveling off in many major metros.

For example, Zillow recently issued a housing market forecast for San Francisco, which was one of the hottest real estate markets 18 months ago. By their estimation, home prices in the city will actually drop a bit over the next 12 months.

“San Francisco home values have gone up 0.6% over the past year and Zillow predicts they will fall -0.4% within the next year,” the company said in October 2016. This is a market that has peaked, plain and simple.

Similar trends are playing out across the state, though to varying degrees. In San Diego, for example, home prices are expected to rise by just 1.7% over the next 12 months, compared to a gain of 4% over the last year or so. In Los Angeles, it’s the same thing. Prices rose 6.9% over the last year, according to Zillow. But they are forecast to rise by a mere 1.3% over the next year.

3. The hottest markets will continue to be in the Pacific Northwest.

Housing market forecasts for 2017 suggest that Seattle, Portland and other real estate markets in the Pacific Northwest will continue to outpace the nation in 2017, in terms of home-price appreciation.

This housing market forecast is based on solid evidence. After all, the Seattle and Portland metro areas saw double-digit price growth during 2016, and the supply-and-demand situation that caused this hasn’t changed significantly. So these markets will probably see bigger home-price gains in 2017 than most other metros.

This housing market prediction has been echoed from several sources, including the folks at Zillow. Their 12-month forecasts for Seattle and Portland (through October 2017) call for price gains of 6.9% and 7.5% respectively, much higher than the 2.7% increase predicted for the nation as a whole.

Related: Seattle leading the pack in 2017

Earlier this year Veros Real Estate Solutions, a company that specializes in property valuations and analytics, published a U.S. housing market forecast that singled out Portland and Seattle as two of the markets to watch over the coming months. Their forecast extended through June 2017.

According to the report:

“The top forecast markets are showing appreciation in the 10% to 11% range with the Pacific Northwest and Colorado having a lock on 8 of the top 10 … Seattle, Wash. (+11.2%), Portland, Ore. (+11.1%), Denver, Colo. (+9.9%) and other metropolitan areas in these same vicinities appear very strong over the next year.”

4. Mortgage rates will rise gradually in 2017 but stay below 5%.

This housing market forecast comes from the Mortgage Bankers Association (MBA), which recently predicted a slight rise in mortgage rates through the end of this year. The MBA expects the average rate for a 30-year home loan to reach 3.7% by the end of 2016, and to continue rising gradually throughout 2017.

Here is their latest forecast for 30-year mortgage rates, issued in September:

  • Q1 2017: 3.9%
  • Q2 2017: 4.1%
  • Q3 2017: 4.3%
  • Q4 2017: 4.4%

Of course, a number of analysts made similar predictions at the end of last year. The general consensus was that mortgage rates would rise gradually throughout 2016. But that did not happen. In fact, the average rate for a 30-year home loan has declined since the beginning of this year.

It goes to show, you have to take mortgage and housing market forecasts with a grain of salt. They’re an educated guess, but they don’t always pan out.

5. FHA and conforming loan limits could rise in some metro areas.

Most mortgage programs have size limits associated with them. For instance, there are “conforming” loan limits that dictate the maximum size for mortgage loans that can be sold to Fannie Mae and Freddie Mac. There are limits for FHA and VA loans as well.

All of these loan limits are based on median home prices, to some extent. And since prices have risen sharply in many cities this year, we could see some higher loan limits in 2017.

Loan limits vary by county and are generally the same across an entire metro area. For instance, all cities and counties within the Seattle metro area have the same loan limits. And that’s one of the places that could see higher limits in 2017. Home prices in Seattle (and a few other metro areas) rose by double digits during 2016. It would not be surprising to see federal housing agencies increase loan limits for some of these housing markets in 2017.

Like Real Estate Forecasts?

Do you enjoy reading real estate market forecasts and predictions? If so, you should follow us on Twitter. We regularly publish updates for major U.S. cities and metro areas, including: Atlanta, Austin, Boston, Chicago, Dallas, Denver, Houston, Miami, Los Angeles, New York City, San Francisco and others.

Disclaimer: These U.S. housing market forecasts and predictions have been provided for your reading enjoyment. But you shouldn’t bank on them. They include third-party data and projections from people and organizations not associated with the Home Buying Institute. They are the equivalent of an educated guess. HBI makes no claims or assertions about future housing market conditions.

66-Page Handbook for Bay Area Home Buyers Available for Free

A new e-book published recently helps San Francisco Bay Area home buyers make informed decisions when buying a house in that red-hot real estate market.

Bridgepoint Funding, a full-service mortgage company located in Walnut Creek, California, has published a 66-page handbook for Bay Area home buyers. The book can be downloaded in PDF format for free via the company’s website.

Here is the book’s download and information page:

According to a related press release, this comprehensive e-book was created specifically for home buyers and mortgage shoppers in the San Francisco Bay Area. It is part of a broader educational campaign launched by the company.

An Update on the Bay Area Housing Market

The Bay Area housing market has changed significantly in recent years. It went from boom to bust and is not in a sustained recovery. Many cities in the area have experienced double-digit home price increases in the last year alone. Meanwhile, residential real estate inventory has shrunk, forcing Bay Area home buyers to compete fiercely with one another.

Those who are planning to enter this hot housing market should educate themselves beforehand. That’s where the Bay Area Home Buying Guide comes in. The book starts off with an update on regional housing market conditions, including forecasts from several analysts and economists. After that, it takes the reader through the entire home buying process, in step-by-step fashion.

Part of a Larger Educational Campaign

Bridgepoint Funding says the Bay Area home buyer’s guide is just one part of a broader educational campaign it is conducting. The company also researches and writes about the housing market on its blog, several times per week.

According to Mike Trejo, owner of Bridgepoint Funding, educating home buyers and mortgage shoppers has always been a key part of the company’s philosophy:

“Buying a home is such an important milestone in people’s lives,” Trejo said. “It’s important to me that they are well informed about the process. We want to be their mortgage partner for the long term, and education is a key part of that relationship.”

How and Where to Download the Guide

Bay Area home buyers can download the 66-page guide in PDF format, at no cost. The e-book can be viewed on any PDF-capable computer, as well as most mobile devices. It can also be printed for easier reading.

The company said it encourages Bay Area real estate agents and other housing professionals to share the guide with their own website visitors. For licensing guidelines and sharing instructions, please refer to the book’s information page linked above.

Is the Market Finally Cooling Off?

In other Bay Area housing market news, real estate professionals from around the region are reporting what they feel are the early signs of a cooling trend. Trisha Motter, president of the Santa Clara County Realtors Association, recently told CBS SF Bay area:

“We’re not seeing the bidding frenzies or paying as much over list price as we were before … The market has slowed down. Houses are staying on the market longer.”

This is one of several reports we’ve seen in recent weeks that suggest the Bay Area housing market could be slowing. A cooling trend might be just what the doctor ordered at this point, given the housing affordability issues that have arisen in recent years.

Dallas Housing Market Forecast 2017: Will It Continue to Outpace the Nation?

Economists are calling Dallas one of the hottest real estate markets in the country. Recent forecasts suggest the city could outpace the nation in 2017 as well, in terms of home-price gains. Here are the latest housing market trends, forecasts and predictions for Dallas, Texas.

One of the Hottest Real Estate Markets in August

In August, the economists and analysts at Realtor.com created a list of the hottest real estate markets in the U.S., for that particular month. Their “hotness” rankings were based in part on how quickly homes are selling, and how much demand their is from buyers.

According to the report:

“[Chief economist Jonathan] Smoke and his team looked at the median number of days homes spent on the market to gauge the supply of homes for sale, and the number of listing views per market to arrive at a list of the 20 hottest real estate markets in the country.”

Based on their analysis, Dallas was ranked as the second-hottest real estate market in the nation for the month of August, with relatively quick sales and strong demand.

Perhaps this is why most 2017 forecasts for the Dallas housing market are calling for continued (and significant) home-price gains next year. There is a lot of demand for homes across North Texas, but limited supply. This is putting upward pressure on residential property values.

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Rapidly Rising Home Prices

According to the widely cited Case-Shiller Home Price Index, house values in Dallas are higher now than ever before. In fact, they’re well above the peak reached during the last housing bubble.

The median home price in the DFW area is around $230,000, according to a report published recently by HSH.com. Several sources have reported double-digit gains in house values over the last year. That’s a much faster rate of appreciation than the national average.

Which begs the question: How much higher can home prices climb in the area? Here are some forecasts and predictions for the Dallas housing market in 2017.

Dallas Housing Market Forecast for 2017

The real estate information company Zillow recently offered a 12-month forecast for the Dallas market, projecting through August 2017. By their estimation, home prices in the city will rise by approximately 7.3% between now and this time next year.

In August, the company stated: “Dallas home values have gone up 16.6% over the past year and Zillow predicts they will rise 7.3% within the next year.” By comparison, they are predicting a gain of only 2.4% for the nation as a whole. So in this regard, the Dallas housing market is predicted to outpace the nation over the next year.

Earlier this month, the Scottsdale, Arizona-based home builder Taylor Morrison announced they would be expanding into the Dallas real estate market. The company said it would focus it’s home-building efforts on the $300,000 to $500,000 price point, “which research has shown is underserved in the Dallas real estate market.”

On the mortgage front, analysts are forecasting a continuation of the low rates we’ve seen in recent weeks, at least in the short term. The average rate for a 30-year fixed home loan has been hovering below 3.5% for the last few weeks. The Mortgage Bankers Association (MBA) recently predicted that 30-year mortgage rates would rise gradually in the months ahead, but stay below for 4% for the rest of this year.

Here is the MBA’s August forecast for average 30-year mortgage rates, by quarter:

  • Q3, 2016: 3.5%
  • Q4, 2016: 3.7%
  • Q1, 2017: 3.9%
  • Q2, 2017: 4.1%
  • Q3, 2017: 4.3%
  • Q4, 2017: 4.4%

In Conclusion

The general consensus appears to be that home prices in Dallas will continue to rise steadily in 2017, but at a slower pace than the last couple of years.

Housing demand is expected to remain strong due to low mortgage rates and the relatively strong job market in the Dallas-Fort Worth metro area. Rising home prices could weaken demand, though, as affordability becomes an issue for some would-be buyers.

Disclaimer: This story includes forecasts for the Dallas housing market in 2017. Predictions were made by third parties not associated with our company. The Home Buying Institute makes no claims or assertions regarding future real estate conditions.