Well it’s here – 2017 is in full-swing, with a fresh financial start, defined resolutions, and a new administration in D.C. There are many questions circling what the financial industry will look like come fourth quarter. WalletHub, a consumer finance website, has released their financial predictions as we begin to wade through 2017.
- U.S. GDP growth will remain anemic, at 2.1% – Closing 2016 at approximately 1.75% WalletHub is predicting low growth, but growth is still a positive.
- Existing home sales will rise to $6M, despite higher rates – WalletHub forecasts nearly $6M in home sales for 2017, and surprisingly they attribute this to higher interest rates. “If interest rates rise slowly, we may see a nice bump in home sales and mortgage availability as buyers see low interest rates slowly fading and banks have higher rates to buffer against risk,” said Dr. Robert Eyler, director of the Center for Regional Economic Analysis at Sonoma State University.
- The Fed will raise rates twice, bringing its target to 1.125% – With only one rate hike in 2016, it is expected that we will see two in 2017. What does this mean for consumers? According to WalletHub, “each rate hike costs people with credit card debt around $1.4 billion in additional interest charges. As a result, consumers interest charges will be at least $2.8 billion higher in 2017 relative to 2016.” Not that you ever want to build debt, this is one more reason to be careful as you spend.
- Credit card debt will break all-time records, topping $1 trillion owed – As the dust settles it seems that 2016 will end up totaling around $80 billion in credit card debt. Ending 2016 at $80 billion seems to only be a starting point as early estimates project 2017 leaving the $1 trillion mark in the dust. This prediction coupled with the predicted rate hike is even more reason to be strict in your spending and to have a defined financial plan for the year.
- Consumer credit scores will peak at 675 in 2017 – The current average person’s credit score of 668 is expected to peak and plateau in 2017 around 675. Use this expected average increase as an opportunity to evaluate your score and efforts.