5 reasons it will be harder to buy a house in 2017

Nearly 5.5 million previously lived-in homes were sold last year, making 2016 the strongest for the housing market since 2006. But sales slipped in 2.8 percent from November to December, according to the National Association of Realtors (NAR), and sales of new homes fell to a 10-month low, according to the Commerce Department. Both figures could be signs that purchasing a home is getting more difficult despite sizable demand from buyers.

Several factors are making it harder for those aspiring homebuyers, from rising mortgage rates to rapidly escalating prices in some areas. Here are five forces in the housing market that could keep potential homebuyers from the closing table in 2017.

1. FHA mortgage insurance: The Trump administration on Friday suspended a measure to lower mortgage insurance premiums by a quarter percentage point on home loans backed by the Federal Housing Administration. The reduction was set to go into effect Jan. 27 and was an effort to help borrowers facing higher mortgage rates.

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The change means potential homebuyers will miss out on savings of $500 a year on average, which may not be enough to sideline many buyers, though they will have to swallow higher costs. But it may make a bigger difference to borrowers seeking larger mortgages, says Scott Sheldon, a loan officer with Summit Funding in California. "On a bigger size loan in [more expensive] parts of the country you're talking about payment savings of a hundred dollars a month, $1,100 per year," Sheldon said in an email. "I personally lost two transactions over this in the last week."

2. Rising mortgage rates: As mentioned earlier, rates on home loans have risen since the presidential election in November. The rate on the 30-year fixed mortgage, the most popular loan for purchases, has increased by more than a half-percent, from 3.47 percent in November to 4.06 percent this month. On a $200,000 home loan, that means an extra $54 a month on the mortgage payment.

Is this enough to deter buyers? Yes, if they are in the market for the first time. In January, 44 percent of first-time buyers planned to buy this year, down sharply from October, when 55 percent said they intended to buy, according to a NAR survey. But the group found that demand for repeat homebuyers hadn't been affected by the rise in mortgage rates.

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3. Low inventory: Even if you're ready to buy, you may not find that home that makes your heart putter. This year has started out with the lowest inventory of for-sale homes since at least the recession, according to the NAR. The group found that inventory levels in December were 11 percent lower than a year ago, marking 51 straight months of below-normal supply. The problem is especially pronounced in hot markets in parts of Washington, Oregon and California.

4. High prices: Home values reached a new high in October of last year, rising 5.6 percent year over year, according to the latest data from the S&P CoreLogic Case-Shiller Home Value Indices. The biggest price increases occurred in Seattle, Portland, Oregon and Denver. Higher prices could make it harder many buyers to afford a down payment on a home or qualify for a mortgage.

Home affordability has decreased by 20 percent to 30 percent since 2012, but not enough to trigger a decline in values, said David Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices, in a statement. "Nevertheless, home prices cannot rise faster than incomes and inflation indefinitely," he said.

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5. Too much competition: The NAR found that average listing views increased 40 percent to 80 percent in the last three weeks of December versus a year ago, suggesting there may be more buyers getting ready to enter the market. And with fewer homes on the market, buyers may face bidding wars on the most desirable homes.

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