Good news for homeowners: November’s real estate market data was recently released by the S&P Case-Shiller Index and home prices climbed 5.6%. That’s a slight increase from October’s gain of 5.5%.
It’s important to note, however, that the biggest gains were made in the West (namely in Seattle, Portland, and Denver), while home prices in the Mid-Atlantic region grew moderately. Still, home prices are rising faster than inflation and rising mortgage rates could squeeze out the vulnerable first-time homebuyer market in 2017.
Economists point to a number of factors driving up the average home value. Low rates of unemployment, an improving economy, and fierce competition among buyers are three of the biggest factors. While mortgage rates remain relatively low from a historical perspective, they’ve jumped approximately 50 basis points (0.5%) since November, and industry experts predict that home price growth may stabilize in 2017 as a result.