Property analysts are unanimous in that 2016 has been one of the best years for the US housing market since the crisis. With the sector already looking forward to more of the same next year, now is a good time to take a look at some forecasts for the trends in the US property market in 2017.
The Active Home Shopper Report published by Realtor.com in September does just that by providing an insight into buyer preferences and obstacles for the US property market in 2017. The survey examines five different demographics and their varying requirements and barriers for buying a home.
The report predicts that the busiest times for the US housing market in 2017 will be the spring and summer seasons. According to its findings, the majority of would-be buyers plan to buy a property within the next seven months, as from April next year.
First-time buyers in the US property market in 2017
47% of those included in the survey stated they were first-time buyers, a statistic that reflects the general tendency this year within the market. Within the specific group of older millennials (25 to 34 years old), this percentage rises to 74%.
It therefore follows that one of the main trends in the US property market in 2017 will be an influx of first-time buyers from this particular age group. However, also following this year’s pattern, these potential buyers will find several financial obstacles in their way.
Impediments to a US property in 2017
A major issue among first-time buyers is affordability and in the survey, over a quarter say that they’re unable to buy because they cannot find a property within their budget. This impediment is likely to continue well into 2017 as prices for US property continue to rise across the country. These price hikes will also exert more pressure on the US rental property market, already experiencing low vacancy rates.
The lack of funds for a down payment is another obstacle in the way of buying a home in 2017, particularly for millennials, an age group where well over one third are without sufficient funds. Credit scores are also a problem for first-time buyers, particularly those in the younger age brackets.
Preferred house types in the US property market in 2017
Single family homes are overwhelmingly the preferred housing type across the entire spectrum of age groups included in the survey. Some 56% of the survey state that they’ll be looking to buy a detached home next year rather than a townhouse or apartment.
This percentage reaches its highest among those aged between 55 and 64 where 70% state a preference for a single family home. Among the 35 to 44 year-olds, 63% say they are looking for a detached property.
However, this type of property is in very short supply in most locations across the US. A recent report by the National Association of Realtors found that demand for single family homes in the vast majority of metropolitan areas far exceeded supply. The imbalance is particularly acute in southwest Florida and Miami.
Motives for buying a property in the US in 2017
The Realtor.com survey also looked at buyers’ reasons for purchasing. The main motivation across the different demographics was dissatisfaction with their current home with 26% claiming they “felt tired of” their property. Among first-time buyers, this percentage rises to 34%.
Low interest rates in the US are the principal motive for those aged between 45 and 54. Low rates are expecting to continue in 2017 – possibly with a slight uptick – providing ideal credit conditions for buyers without affordability issues. Among older buyers, gaining privacy was the main incentive to buy a new property with retirement as close second, particularly for those aged 55 to 64.
Investment opportunities in the US property market in 2017
“Based on this report, we can see some clear trends for the investor in the US property market in 2017,” said Dies Poppeliers, Managing Director of BRIC Group. “Everything points to a continuation of highly favourable conditions for the buy-to-let market – providing rental homes for those who cannot afford to buy their own. Pressure is also going to continue on the supply of single family homes in desirable areas, enhancing investment potential in building land.”
BRIC Group, an investment company specialising in global real estate opportunities, offers US real estate investments including turnkey properties in Florida and Houston, and land plots in Florida. BRIC Group is also developing The Coral resort, in Northeast Brazil, a luxury beachfront resort with land and villa investment opportunities. BRIC Group has been creating wealth for its clients since 1996 and has offices in Brazil, Dubai (consulting office), Hungary, Spain and the US.