Recently Zillow jumped in with six predictions for next year’s housing market, touching on some of the more nuanced factors that influence who will be buying and selling homes next year, where they’ll be focused, and what challenges they stand to face. Speculation also brought up the potential effect of Trump’s hard-line immigration plans on construction industry labor — and its expectations for America’s historically low homeownership rate. The 2017 predictions:
1. “Cities will focus on denser development of smaller homes close to public transit and urban centers.”
2. “More millennials will become homeowners, driving up the homeownership rate. Millennials are also more racially diverse, so more homeowners will be people of color, reflecting the changing demographics of the United States.”
3. “Rental affordability will improve as incomes rise and growth in rents slows.”
4. “Buyers of new homes will have to spend more as builders cover the cost of rising construction wages, driven even higher in 2017 by continued labor shortages, which could be worsened by tougher immigration policies under President-elect Trump.”
5. “The percentage of people who drive to work will rise for the first time in a decade as homeowners move further into the suburbs seeking affordable housing — putting them further from adequate public transit options.”
6. “Home values will grow 3.6 percent in 2017, according to more than 100 economic and housing experts surveyed in the latest Zillow Home Price Expectations Survey. National home values have risen 4.8 percent so far in 2016.”
