CoreLogic, one of the nation's leading financial and property analytics companies recently released their Market Pulse for December 2016. In their report, there were projections on housing growth nationwide with several key components showing growth in the next year. Of importance to property managers in New York City were two major components that were addressed in the report, which were vacancy rates and overall rent growth for 2017.
According to Frank Nothaft, CoreLogic senior vice president and chief economist stated "vacancy rates will likely remain low in the rental market and decline in the homeowner market. The low level of single family building means that for-sale inventories will remain lean in many markets." Mr. Nothaft also says to expect home price appreciation in most markets with rent growth also continuing to grow but at a slower pace. He is predicting rent growth of 3% for 2017 with home price index increase of 4.7% in the same time period.
Other key components to the report are the following:
- The economy will see growth between 2-2.25% in 2017.
2. There will be an increase in mortgage rates- Interest rates will average just over 4% next year, about 0.5% higher than in 2016, according to the forecast. The consensus is that the Federal Reserve will raise the Federal interest rate several times in 2017 which will affect the cost of overall loans.
3. Less advantages to refinance- Higher mortgage rates will make originations of loans drop.
4. Credit risk will remain low- New loan originations will maintain low credit risk. The first half of 2016 saw lower risk attributes than those made 15 years ago. Next year we can potentially see heightened fraud risks, but altogether credit risks are looking positive.
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