Existing-Home Sales Poised to Climb 3.5% in 2017
As the job market gets stronger and unemployment rates decrease, consumers are gaining household confidence which experts say may lend itself to a decade high of sales. However stagnant wages, and the lack of supply paired with the lack of affordable options are what's preventing the market from reaching its peak.
According to Lawrence Yun, Chief Economist of the National Association of Realtors, the first quarter was the best performing quarter they've seen in the last decade with about 5.62 million sales. This trend is expected to continue, as sales are already 3.5% above 2016 records. As many cities are facing growing pains, the national median existing home-price is expected to rise 5% this year.
Housing construction is expected to jump 8.4% to 1.27 million. However this does miss the mark for the 1.5 million new homes required to make up for the lack of supply in recent years. Yun believes that new single-family homes will be up 8.4% from last year, totaling 620,000 homes.
“We have been under the 50-year average of single-family housing starts for 10 years now,” said Yun. “Limited lots, labor shortages, tight construction lending and higher lumber costs are impeding the building industry’s ability to produce more single-family homes. There’s little doubt first-time buyer participation would improve and the homeownership rate would rise if there was simply more inventory.”