2017 will pump $1 trillion+ into the balance sheet of U.S. homeowners… again.
Based on the average projection of more than 100 experts surveyed by Pulsenomics this month, U.S. home values are expected to increase by 4.8% in 2017.
On the heels of last year’s nearly 7% national appreciation rate, the prospect that home prices will rise less than 5% on average this year might be dispiriting to some. However, 4.8% is nothing to sneeze at–-not only is it well above the historical average annual gain–it’s the most optimistic projection we’ve seen for 2017 in five years. It’s a pretty safe bet that U.S. home equity growth will exceed $1 trillion for the sixth consecutive year, and continue to bolster consumer confidence and household spending in 2017—especially if more renters can afford the transition to homeownership.
The outlook beyond 2017 is less rosy–-and more uncertain. The experts’ longer-term forecasts continue to diverge, which reveals that volatility (i.e., risk) in the $26+ trillion U.S. residential real estate market is growing, even as home prices recover from crisis-era lows. Notably, the most pessimistic (least optimistic?) group of experts now expects negative nominal returns for U.S. housing in 2019 and 2020, and after 2017, they expect negative real (i.e., inflation-adjusted) returns in every year through 2021.