But as mortgage rates ratchet up, homes will be less affordable, tamping down sales and home-price growth in many cities.
HOME PRICES ROSE AT A NICE CLIP in 2016 as buyers, encouraged by job growth and exceptionally low mortgage rates, competed for slim pickings. Prices increased 5.8% nationally, compared with 4% in 2015, according to Clear Capital, a provider of real estate data and analysis. But with home prices out of reach for many first-time buyers, a limited supply of homes for sale and mortgage credit still tight, Kiplinger forecasts that price increases in 2017 will revert to a 4% pace—the historical U.S. average.
Home values rose in 253 of 276 cities tracked by Clear Capital, going up by double digits in about one-fifth of them. (For data on the 100 largest metro areas tracked by Clear Capital, see the table on page 44.) The cities with the biggest gains were buoyed by vibrant local economies, where rising population and job growth fueled demand. They include Deltona, Fla. (with a gain of 14.7%), Austin, Texas (14.5%), Salt Lake City (12.3%), Seattle (11.4%) and Portland, Ore. (11.4%).
But many homeowners have been left behind in the latest price run-up. Average prices remain nearly 12% below the peak they hit just before the housing bust a decade ago. And home values fell in a couple of dozen metro areas—mainly in parts of the Northeast, Mid Atlantic, and industrial Midwest and South. The price drops occurred mostly in smaller cities with lackluster economies, such as Watertown,N.Y. (–7.2%), South Bend, Ind. (–7.6%), Atlantic City, N.J. (–9.9%), and Baton Rouge, La. (–3.3%), where the economy took a hit because of declining oil prices.
During the last boom, “everyone did well,” says Alex Villacorta, vice president of research and analytics at Clear Capital. “In the downturn, everyone did badly. As the recovery began, everyone got a bump-up. Now, there are winners and losers.”
HOUSING MARKET HEADWINDS
This story is from the April 2017 edition of Kiplinger's Personal Finance.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
Already a subscriber ? Sign In
This story is from the April 2017 edition of Kiplinger's Personal Finance.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
Already a subscriber? Sign In
Your Vacation Home Could Provide Tax-free Income
If you plan to rent out your vacation home, it's important to understand how your proceeds will be taxed.
A SOLID YEAR FOR THE KIPLINGER 25
All but one of our favorite actively managed, no-load mutual funds gained ground as markets recovered.
IT'S NOT YOUR IMAGINATION: YOUR CEREAL BOX IS SHRINKING
To avoid raising prices, some manufacturers are reducing the size of common grocery items. Here’s how to fight back.
SHOULD YOU WORRY ABOUT BEING LAID OFF? IT DEPENDS ON YOUR INDUSTRY
Downsizing has hit certain sectors. But cutbacks may be slowing, and some companies are expanding.
How identity thieves are exploiting your trust
Con artists themselves are disguising as well-known brands to steal your money and personal information.
CUT THE COST OF YOUR WIRELESS BILL
AT&T, T-Mobile and Verizon dominate the market, but smaller outfits offer similar network coverage at lower prices.
MAKING HOME ENERGY MORE AFFORDABLE
Households in need can get energy-efficiency upgrades, help with utility bills and more from this nonprofit.
A HEAD START FOR SAVERS
The Saver's Credit is designed to help low- and middleincome taxpayers contribute to a retirement account.
Say I Love You With a Money Date
To nurture a lasting bond with your partner, meet regularly to talk about money.
Plan for Your Own Elder Care
AFTER I wrote a series of columns in 2022 about elder care planning for family members, I received a number of responses like this one: “What about married couples who have no children or whose family members don’t live nearby?” wrote one reader. “Or a single individual with no close relatives? How should these people plan for their own elder care?”