Markets in the Midwest and South will take top billing in 2017, setting the stage for a year of moderate home price growth, according to Clear Capital’s recently released Home Data Index (HDI) Market Report. Home prices on a national scale are projected to increase 2.4 percent in the year ahead, while in the South are projected to increase 3.5 percent and in the Midwest, 3.4 percent.
Starring markets in 2017 include Dallas-Fort Worth-Arlington, Texas, No. 1 with 11 percent projected growth; Denver-Aurora, Colo., at 7.3 percent; Nashville-Davidson-Murfreesboro, Tenn., at 7.2 percent; Milwaukee-Waukesha-West Allis, Wis., at 7.1 percent; and Jacksonville, Fla., at 6.6 percent.
The move-up of the Midwest and South will mark an end to the West’s major player-role; according to the report, home prices in the West are projected to increase 1 percent. Affordability, says Clear Capital Vice President of Research and Analytics Alex Villacorta, will also be an issue.
“Affordability will be the name of the game over the course of 2017, as the past few years of relatively impressive price growth have pushed home prices closer to the peak levels of 2006, with several markets reaching above and beyond to all-time highs,” Villacorta says. “The national housing market will continue to grow, albeit markedly slower than in past years, with national home prices moderately increasing to the tune of 2.4 percent; however, Western growth will be greatly limited due to a widespread lack of affordability in almost all of the major markets in the region—a key reason for its tempered growth over the course of 2016.
“Contrastingly, the traditionally lower-priced and more affordable regions of the South and Midwest will set the pace for growth over the next year, while the luxury markets of the Northeast will again struggle to make impressive gains,” says Villacorta. “In combination with affordability concerns already plaguing demand in some markets, the potential for additional interest rate increases over the coming year, as well as any potential market shake-ups due to the new presidential administration, could further jeopardize the housing market’s now moderating recovery. We’ll be on deck throughout the next year monitoring housing markets across the nation, but for now, our models are predicting softer growth for 2017.”
Source: Clear Capital
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