Metro’s housing market ranked low
Report puts ABQ area at 78th out of 100 cities
A new report ranks the Albuquerque metro area housing market at 78th in the nation out of 100 cities amid predictions that the U.S. will see a slowing housing market in the wake of rising mortgage rates.
The 2017 housing forecast from Realtor.com is predicting home prices nationwide to increase 3.9 percent, with interest rates expected to hit 4.5 percent, due to higher expectations for inflationary pressure in the year ahead.
The Albuquerque area, which sits smack dab between St. Louis and Richmond Va., ranked No. 77 and No. 79, respectively, is expected by the organization to increase sales by 3.6 percent and post a 4.1 percent price appreciation. By comparison, Phoenix is projected as the top housing market in the country next year, with price gains of 5.9 percent and sales growth of 7.2 percent.
Los Angeles ranks second, and Boston is third. Sacramento and Riverside, both in California, round out the top five. All these metros are posting strong population and job growth.
Tucson was the ninth-strongest market and Portland, Ore., a millennial magnet, ranked No. 10. Closer to home, El Paso had the No. 89 slot out of 100 largest metros ranked by Realtor.com’s forecasters.
New-home sales are estimated to increase 10 percent, and new home starts 3 percent next year. The real estate forecast expects 2.1 percent economic growth in the U.S. in 2017.
Tight inventory nationwide also is a problem, according to Realtor.com.
“We don’t expect the outcome of the election to have a direct impact on the health of the housing market or economy as we close out 2016. However, 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,” said Jonathan Smoke, chief economist for Realtor.com referring in part to Donald Trump’s presidential election.
He also predicts the post-election uptick in mortgage rates “may price some first-timers out of the market.” Yet he forecasts that millennials (at 33 percent) will lead the 2017 parade of buyers, with baby boomers (at 30 percent) the next largest demographic of home seekers.