Here we go 2017!
This report is our national and Arizona 2017 Market Report for Mid December
1. Some of the responses to president elect Trump’s surprise victory have been positive.
2. Stock prices rebounded higher with the expectations that tax cuts increased infrastructure spending and reduced regulation will boost long term economic growth.
3. Interest rates have risen, however, as investors are now expecting slightly higher inflation, but with stronger than expected economic outlook, higher opportunity costs. From Wells Fargo Economics and Bloomberg WFRE.
4. Housing affordability is still falling as home prices continue to rise much faster than individual income. This is a risk as the conventional mortgage rates will reduce affordability further.
5. Builders remain optimistic especially in the west and south.. A slightly more upbeat housing forecast mostly reflects shift towards lower priced homebuilding.
6. Recent spike in mortgage rates has already caused refinancing activity to fall sharply. In the past few weeks since Trump was elected investors have raised their expectations for economic growth and inflation. Some prospective buyers may rush to lock in rates. Those buyers in higher priced markets may be forced to delay as larger monthly payments outreach their budgets.
7. While national home prices reached a new high in September, home prices in a 13 of a 20 city index remain below prerecession levels. This index has risen 5.5 percent in the last year. From the 2017 U.S. housing Market Outlook in December 03, 2016
PHOENIX has been chosen as #1 housing market 2017 by Realtor.com
Realtor.com expects housing to see a gain of 5.9 per cent and sales growth of 7.2 per cent.
Arizona should add 81,000 new jobs in 2017 dropping unemployment to 4.8 in that time period. Population growth is expected to stay at about 1.6 %. That is half of our average of 3.2 percent but double the national average.
Arizona’s average wage moved from 85% of the national average wage in 2008 to 96% of the national wage in 2016. More importantly, 2016 is the year that Arizona finally righted its economy to grow jobs first and rooftops second in an article from Phoenix News in 2016.
Please tune in to our January Real Estate Newsletter on Tuesday January 3 for more news on Arizona Real estate.