What’s in Store for Housing Market in 2017? – Part one of two

 We got spoiled in 2016. Mortgage rates fell below 4 percent at the beginning of the year, and they spent the summer flirting with record lows. And they began 2017 above 4.25 percent.
It’s a good idea to keep things in perspective, though. For most of the past 50 years, homebuyers would have been delighted to get mortgage rates in the four percent range.
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.
Here’s what’s in store for housing in the beginning of this year, from a look at interest rates to a set of New Year’s resolutions for millennial homebuyers.
Homebuyers and mortgage refinancers had a nice run in 2016: The average 30-year fixed-rate mortgage was under 3.75 percent all summer. Then it shot upward after the presidential election and averaged 4.24 percent in December.
Forecasters believe mortgage rates above four percent are here to stay. The Mortgage Bankers Association predicts that the 30-year fixed will average 4.3 percent in the first quarter. Fannie Mae, the National Association of Realtors and Wells Fargo predict it will average 4.1 percent. Freddie Mac forecasts an average mortgage rate of 4.2 percent for all of 2017.
Matthew Carbray, a certified financial planner for Ridgeline Financial Partners in Avon, Connecticut, says he urged clients to refinance throughout 2016 to lock in low mortgage rates. Now he’s telling clients that early 2017 is a great time to buy a home — again, because mortgage rates are still low, even if they’re in the 4s.
“For those who have been contemplating a purchase, it may be as opportunistic a time as you’re going to get to lock in a rate,” Carbray says.
For a long time, the real estate industry waited for millennials to start buying houses in big numbers. They finally arrived. In 2016, people under 35 made up 61 percent of first-time homebuyers, according to NAR.
Lisa Ford, a Realtor and a board member of the Orlando Regional Realtor Association in Florida, has a list of New Year’s resolutions for anyone (especially millennial first-timers) who want to buy in 2017.
• Prepare and file income taxes early, because lenders want to see the latest information about borrowers’ income and taxes. Doing your 2016 taxes helps you gather the documents you need.
• If you get a tax refund, set it aside for expenses such as a down payment or mortgage closing costs.
• Before looking at homes, find an experienced loan officer “who’s familiar with the first-time homebuyer down payment assistance programs that are available.”
Please read the May issue of The Magazine of Santa Clarita for the remainder of the article.
For more information, please call Farrah Johannsen at 323-985-4080.