Worcester ranked worst 2017 Mass. housing market, 63rd nationally
Courtesy American Advisors Group via Flickr
A new report has ranked the Worcester-area housing market at 63rd in the nation for 2017 amid predictions that the country will see a slowing housing market in the face of increasing mortgage rates.
The 2017 housing forecast from Realtor.com is predicting nationwide home prices will increase 3.9 percent with interest rates expected to reach 4.5 percent due to higher expectations for inflationary pressure in the year ahead.
The Worcester-into-Connecticut region is expected by the organization to see a 3.5-percent increase in sales with a 5-percent increase in price. In comparison, Springfield (ranked 34) is expected to grow sales by 4.7 percent and price by 5.1 percent, while the Providence-Warwick (ranked 24) area is expected to grow by 6.3 percent in sales and 4.1 percent in price. The Boston-Cambridge-Newton area was ranked third on the list with price and sales expected to grow 6.1 and 6.3 percent, respectively.
Part of the expected slowing of the market is being attributed to the result of the election of President-elect Donald Trump, according to the organization, as before the election demographics and an improving economy were laying the foundation for a substantial increase in first-time buyers in 2017. However, those buyers will face increasing hurdles as a result of the mortgage rate increases that have been seen in the wake of the election. These higher rates are associated with anticipation of stronger economic and wage growth next year, according to the organization, both of which favor buyers. However, higher rates will make qualifying for a mortgage and finding affordable inventory more challenging.
“The 40-basis-points increase in rates in the days following the election has caused us to increase our interest rate prediction for next year," Jonathan Smoke, chief economist for realtor.com, said in a statement. "With more than 95 percent of first-time home buyers dependent on financing their home purchase, and a majority of first-time buyers reporting one or more financial challenges, the uptick we've already seen may price some first-timers out of the market."
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