5 Ways the Housing Market Could Change in 2017

by | BiggerPockets.com

How will the housing market change in 2017?

There are a lot of factors at play this year. How can we expect them to mold the property market? What will it mean for home buyers, sellers, and real estate investors?

5 Ways the Housing Market Could Change in 2017

1. Increasing Property Prices

Home prices are heading up in just about every market. High demand and the resulting price lift in urban living areas will drive people to the suburbs. Expect to see areas that were booming in 2005 and 2006 to come back again as buyers and renters seek more affordable places to live.


Related: 7 Real Estate Investors Discuss What They’re Seeing in Their Local Markets

2. Oversupply

Builders and investors are bullish on the market. This continues to fuel new building. This includes new home developments, condo buildings, mixed-use projects, and spec homes. This will continue to be most concentrated in dense urban areas, followed by the suburbs as land prices rise. Eventually this will lead to oversupply, and property owners may be forced to begin to offer larger incentives and cut prices.

3. Interest Rates

Additional building and spending will fuel rising interest rates. Higher interest rates can also compound issues with oversupply and high property prices. Higher mortgage rates will make it even more expensive to buy a home, as well as increase living expenses in general. The Fed Reserve has indicated at least two or three rate hikes may come this year. While this may be a symptom of a stronger economy, many investors may not be anticipating how hard this will hit their cash flow each month.


Related: A Look at Today’s Housing Stats: Are We Entering a New Bubble?

4. Mortgage Lending

The new White House administration has pledged to ease mortgage lending and access to credit. Expect this to mean more aggressive marketing from lenders and progress back toward more subprime-type loan features and lower down payment requirements. However, this may be offset by higher rates, and unless certain regulations and liabilities are cleared, banks and funds may continue to prefer lending to investors rather than regular home buyers.

5. Jobs & Wages

Much of the above is also likely to add to the momentum of jobs being added to the economy. As thousands of new jobs are added in energy, manufacturing, and finance, increased competition for talent could finally boost wages. This will partially offset high housing costs and support more growth in rents and house prices. Still, it will be critical for individuals to position themselves in careers and businesses, which will benefit from emerging technology, as many jobs are replaced by AI and other tech.

Do you agree with this assessment? Anything else you’d predict for 2017?

Let me know with a comment!

About Author

Sterling White

Sterling White is an investor and business owner on a mission to make the world a better place through principled and efficient real estate investment. Even before co-founding Holdfolio, Sterling and his partner Jacob Blackett had been involved with the purchasing and selling of over 100 SFRs. Today, Holdfolio is a prominent platform for investing in income producing multifamily apartments. The firm has been featured in national publications such as US News and was ranked as one of the best real estate crowdfunding sites in 2018 by Fit Small Business. The success of Holdfolio’s technology gave birth to SyndicationPro, a fast growing all in one software solution empowering investors to efficiently and easily raise capital online.


  1. kevin ferris

    In Phoenix, AZ right now there is a drastic shortage of houses available under $250k. These are the homes that investors bought up after the crash, and are still holding as rentals. A lot of these are owned by folks that own just one or two properties. Most of them look like rentals if you know what I mean.

    I think there could be a drastic change in supply if the new administration were to lower capital gains taxes. Instead of 25%, get it down to maybe 10 or 15%. These Mom and Pop investors may decide to cash out on their gains.

  2. Howard Sklar on

    This will be a classic tug-of-war year. I.E. – (the potential for) rising rates increasing apt demand by making home ownership less affordable. Driving up rents (& valuations?), while rising rates simultaneously puts pressure on cap rates.
    ….tug-of-war….see what I mean?

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