CoreLogic 2017 Outlook for U.S. Housing and Mortgage Markets
Economic growth will be a primary factor affecting the housing market in 2017. The latest projections show a consensus that the economy will grow between 2 and 2¼ percent next year. With this as a backdrop, here are five features to look for in next year’s housing market.
First, mortgage rates will be higher, with fixed-rates averaging just over 4 percent for 2017, about one-half percentage point higher than in 2016 for both single-family and multifamily loans.
Second, vacancy rates will likely remain relatively low in the rental market and decline in the homeowner market. The low level of single-family building means that for-sale inventories will remain lean in many markets.
Third, home appreciation in most markets with rent growth also continuing but at a slower pace. In the coming year, we expect the CoreLogic Home Price Index for the U.S. to rise about 5 percent, although some neighborhoods will have double-digit growth and some will experience declines.
Fourth, expect is a drop in refinance originations in 2017.
Fifth, we expect the new loans made to continue to have relatively low credit risk.…