By Lawrence Yun | The Hill
GDP growth is not strong, but the housing market is more than fine. So fine that my forecast for the year is upgraded. Existing-home sales will rise by 3.5 percent and home prices will get a 5-percent boost in 2017.
At the start of the year, home sales were expected to only match up with the last year because of higher mortgage rates and diminishing affordability conditions. Meanwhile, home prices, after increasing over 40 percent in the past five years — when income only grew by 11 percent — was considered topped out with little room for growth.
The first quarter performance proved otherwise — both home sales and home prices were higher by 5 percent, and there’s growing evidence that consumers are feeling good about buying as realtors report increased foot traffic. Additionally, mortgage applications to buy a home are above last year’s levels, and signed contracts to buy a home, despite a small decline in March, are running essentially at decade highs.
