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Analysts: Tucson will be 9th hottest housing market in 2017

Tucson will be the ninth hottest housing market in 2017, while metro Phoenix will be number one, real estate analysts forecast.

Housing prices will rise 6.1 percent and sales will grow by 5.5 percent next year, according to Realtor.com.

Prices in metro Phoenix are predicted to grow 5.9 percent and sales will be up 7.2 percent.

But nationwide, the real estate market is expected to slow compared to the last two years, with home prices rising only 3.9 percent and sales, 1.9 percent to 5.46 million homes. Interest rates are expected to reach 4.5 percent because of inflationary pressure. New home sales are expected to grow 10 percent and new building starts will increase three percent.

“We don’t expect the outcome of the election to have a direct impact on the health of the housing market or economy as we close out 2017. However, the 40 basis points increase in rates in the days following the election has caused us to increase our interest rate prediction for next year,” said Jonathan Smoke, chief economist for Realtor.com.

“With more than 95 percent of first-time home buyers dependent on financing their home purchases, and a majority of first-time buyers reporting one or more financial challenges, the uptick we’ve already seen my price some first-timers out of the market,” he said.

And the website says these will be the top housing trends for 2017: 

  • Millennials and boomers will dominate the market and should power demand for the next 10 years.
  • Midwestern cities will be popular for millennials, particularly Madison, Wis.; Columbus, Ohio; Omaha, Neb;
    Des Moines, Iowa and Minneapolis, Minn.
  • Slowing price appreciation
  • Fewer homes on the market and fast-moving markets
  • Western cities will continue to lead the nation in prices and sales
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2017's predicted Top 10 housing markets

Rank MSA Price Sales
1. Phoenix-Mesa-Scottsdale 5.9% 7.2%
2. Los Angeles-Long Beach-Anaheim, Calif. 6.9% 6.0%
3. Boston-Cambridge-Newton, Mass.-N.H. 6.1% 6.3%
4. Sacramento--Roseville--Arden-Arcade, Calif. 7.2% 4.9%
5. Riverside-San Bernardino-Ontario, Calif. 5.0% 6.9%
6. Jacksonville, Fla. 4.8% 7.0%
7. Orlando-Kissimmee-Sanford, Fla. 5.7% 6.1%
8. Raleigh, N.C. 4.2% 7.6%
9. Tucson 6.1% 5.5%
10. Portland-Vancouver-Hillsboro, Ore.-Wash. 6.6% 5.0%