Dive Brief:
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Homes will spend less time on the market in 2017, which is expected to be the fastest real estate market on record. This will be spurred by new technologies that speed up the homebuying process and a growing appetite for short-notice home tours, according to real estate website Redfin.
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The typical home was on the market for 52 days in 2016, the shortest time on record since 2009. Redfin is projecting that homes will be on the market for even fewer days in 2017.
- The forecast comes amid other predictions by Redfin that include existing homes sales rising 2.8% in 2017 compared to the estimated 3.4% increase this year. Median home prices are expected to jump 5.3% in 2017 compared to an expected 5.5% rise this year.
Dive Insight:
In addition to its forecasts for the housing market’s performance in 2017, which align with recent outputs from peer organizations, Redfin’s latest analysis adds to growing evidence that the homebuying process, particularly among younger buyers, is moving online.
Zillow reported in a survey in October that younger buyers are more likely than previous generations to conduct home searches online, including finding an agent and exploring financing options.
The shift in buying patterns has attracted the interest of startups like Opendoor, an online real estate company that purchases and resells homes. The San Francisco-based firm raised $210 million in its latest funding round as it looks to expand the platform to 10 cities next year.
Redfin’s projections of a slight tapering in home price increases builds on previous estimates by other industry bodies. Earlier this month, CoreLogic said it expects home prices to rise 4.6% from October 2016 to October 2017, lower than the 5.2% year-over-year gains forecast in September.
However, a likely hike in short-term interest rates by the Federal Reserve Board, which is expected to be announced today, stands to impact affordability in 2017. Redfin projects the 30-year fixed mortgage rate to increase in 2017 to as high as 4.3%. The rate rose 40 basis points from 3.57% to 3.94%, CNN Money reported, in the weeks following the U.S. presidential election in response to inflation expectations.
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