Residential and Commercial Real Estate should see a solid year, despite rising interest rates.
“The United States is a growing country, and its economy remains resilient in the face of many challenges,” says NAR Chief Economist Lawrence Yun. This means we should have a strong 2017 again in real estate.
Yun is forecasting the economy to grow by 2.1 % next year and for existing home sales to rise modestly, to 5.5 million units (up from 5.4 million units this year).
On the commercial side, he predicts all sectors to see lower vacancy rates as occupancy demand rises with job growth. Isn’t it wonderful to get good news once in awhile?!?
Of course, we do have a couple of hurdles this year. Yun reminds us that there is a level of uncertainty when new administration comes into office and real estate could be greatly affected.
Another important facet is that there was a rollback of rules under Dodd-Frank (the major financial services reform law enacted after the mortgage disruptions), which might lead to an increase in lending…and this could really help get new home construction going and help with housing shortages we see now.
Oh and then we have Congress! How Congress approaches tax reform matters could also affect real estate and then the Fannie Mae and Freddie Mac could face restructuring, which could also affect the availability of mortgage loans!
Then, the BIG QUESTION: What about mortgage rates? Yun predicts interest rate hikes to be moderate but yes they will come!