CAR predicts that California’s housing market will post a nominal increase in 2017, as supply shortages and affordability seek balance.
The C.A.R. forecast sees a modest increase in existing home sales of 1.4 percent next year to reach 413,000 units, up slightly from the projected 2016 sales figure of 407,300 homes sold. Sales in 2016 also will be virtually flat at 407,300 existing, single-family home sales, compared with the 408,800 pace of homes sold in 2015.
The average for 30-year, fixed mortgage interest rates will rise only slightly to 4.0 percent in 2017, up from 3.6 percent in 2016, but will still remain at historically low levels.
The California median home price is forecast to increase 4.3 percent to $525,600 in 2017, following a projected 6.2 percent increase in 2016 to $503,900, representing the slowest rate of price appreciation in six years.
“With the California economy continuing to outperform the nation, the demand for housing will remain robust even with supply and affordability constraints still very much in evidence. The net result will be California’s housing market posting a modest increase in 2017,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. “The underlying fundamentals continue to support overall home sales growth, but headwinds, such as global economic uncertainty and deteriorating housing affordability, will temper stronger sales activity.”
09-29-2016 EXPO Forecast Final by C.A.R. Research & Economics .