What trends does 2017 bring for landlords? Rental rates are rising and vacancy rates are low. This is great news for landlords, higher market rental rates will bring a higher return on investments which can then be used to upgrade properties, or reinvest. Lower vacancy rates will reduce the turnaround time to fill a property between tenants.
With Higher Mortgage Rates, Should I Invest?
The mortgage rate trends projected for 2017 show a slow climb as interest rates stabilize. These interest rates are historically low which means it is still an ideal time to invest in properties. For most parts of the Country purchasing property is historically affordable, however it may be more challenging for those seeking new property investments this year as opposed to years past.
Interest rates have remained under 5% for the last decade, these ultra-low rates won’t last but they are also a long ways from average. Property prices are expected to continue rising in 2017 but at a pace much slower than this year’s increases.
Cause for Rising Mortgage Rates
- The Federal Reserve increased a key interest rate making it more expensive for banks to borrow money, leading to higher interest rates for home loans.
- The election of our new president has triggered a significant rise in mortgage rates. A typical 30 year fixed mortgage rate went from 3.5% to 4.1%.
- Global economic uncertainty has an affect on US Mortgage rates.
The global economy is unpredictable and there are many looming threats that could greatly affect the housing markets in the United States. However, people will always need a place to live. The risks that landlords may face in an economic downturn are rental rate decreases and a rise in vacancy rates. Overall, 2017 is looking like a good year for the property management industry!
