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

 What’s in Store for Housing Market continues from the April issue’s below:
In many places across the United States, it continues to be a seller’s market, in which there are more potential homebuyers than sellers. In the hottest markets, such as Denver, sellers can expect to get multiple offers if they price their homes well.
Nationally, the inventory of homes for sale was less than 4 1/2 months toward the end of the year. “The inventory has been low, although if new homebuilding continues, that will help inventories,” Ford says.
It’s especially hard to find lower-price homes suitable for first-time buyers. Entry-level homes have been kept off the market because so many owners owed more on their homes than they were worth, says Rick Sharga, chief marketing officer for Ten-X, which runs Auction.com. “Disproportionately, it was that segment of the market that was hit the hardest,” he says.  Lawrence Yun, chief economist for the National Association of Realtors, says, “The good news is that the tightening labor market is beginning to push up wages and the economy has lately shown signs of greater expansion.”
January and February tend to have the least number of home sales, as people stay indoors and recover financially from the holidays.
A.W. Pickel III, president of the Midwest division of AmCap Mortgage Ltd., believes that rising interest rates will push buyers into the market earlier in the year. People will try to buy in winter, figuring that higher interest rates will make homes less affordable in spring.
“I think it’ll begin to pick up in earnest in February, and in March it’ll be running full-bore,” Pickel says.
Sharga believes that rising mortgage rates will cause home prices to rise more slowly in 2017 than they did in 2015 and 2016. Slower price increases should help sales, too, he says.
The new Donald Trump administration might tackle the fate of mortgage giants Fannie Mae and Freddie Mac. The government-sponsored enterprises have been under conservatorship since autumn 2008. In effect, they are managed by a federal agency.
The conservatorship of Fannie and Freddie was supposed to be temporary, but policymakers haven’t figured out what to do about the companies. Congressional conservatives favor abolishing them. Wall Street and many people in the mortgage industry favor privatizing them.
Steven Mnuchin, the nominee to be Treasury secretary under Trump, says privatizing Fannie and Freddie will be a top priority. “It makes no sense that these are owned by the government and have been controlled by the government for as long as they have,” Mnuchin told Fox Business.
Rick Roque, president of MenloFinancial, a bank consulting firm, is heartened by Mnuchin’s words.
“Privatizing Fannie and Freddie will infuse those organizations with more capital, which will enable them to purchase greater volumes of mortgages from lenders,” Roque says. “So that should have the effect of lowering interest rates, or at least keep them from going higher.”
For more information, please call Farah Johannsen at 323-985-4080.