Fast Facts About the Housing Market: December 2017

Now that we’re almost a full month into 2018, we can look back at the end of 2017 and get some perspective on the year.

Overall, 2017 was a great one for existing-home sales. It was up 1.1% from last year and was the best year for sales since 2006.

One interesting part of the data to look at, however, involves first-time homebuyers. In December 2017, 32% of sales were from first-time homebuyers—which seems excellent, compared to the 29% in November 2017. The annual share of first-time buyers in 2017 was 34%, according to the National Association of REALTORS® 2017 Profile of Home Buyers and Sellers; this number was 35% in 2016. The historical norm, though, is usually about 40%.

The NAR noted that the median household income increased again in 2017, which was likely due to the nationwide increase in home prices, caused by the lack of housing inventory that’s pushing out some lower-income buyers. And it’s the first-time homebuyers who tend to be looking for more affordable housing—which means some are just out of luck in this market right now.

Some millennials and first-time homebuyers may be waiting to pull the trigger on buying a house, but that waiting could greatly decrease their borrowing power in a matter of months. Increases in mortgage rates that appear to be looming for 2018 will have a significant impact on what a first-time buyer can afford and qualify for as the year goes on. First-time buyers who financed their home typically financed 95% (compared to repeat buyers at 86%), so interest rates can make a huge difference for buyers who really rely on that affordable financing.

Aside from the data surrounding first-time homebuyers, it was interesting to see Realtor.com’s top 5 “hottest” markets remain fairly steady in December 2017. In November 2017, the top 5 were:

1. San Jose-Sunnyvale-Santa Clara, CA
2. Vallejo-Fairfield, CA
3. San Francisco-Oakland-Hayward, CA
4. San Diego-Carlsbad, CA
5. Stockton-Lodi, CA

In December 2017, the San Jose area kept the number one spot, San Francisco and Vallejo swapped, and Stockton stayed strong at number five. The only main difference is that we saw San Diego-Carlsbad fall out of the top 5 and Colorado Spring, CO jumped into its spot.

1. San Jose-Sunnyvale-Santa Clara, CA
2. San Francisco-Oakland-Hayward, CA
3. Vallejo-Fairfield, CA
4. Colorado Springs, CO
5. Stockton-Lodi, CA

Stay tuned—once the data for January 2018 has been collected, we’ll be back to bring you a new infographic and new insights into the market.