2017 Projections Show Tight Housing Market:

It has already started, the wave of projections for 2017.  And as we are seeing more and more start to hit, they have a common theme: 2017 will continue to be a very tight market.

The latest prognosis comes from Money magazine which reported that nationally, home prices are expected to keep rising, albeit more slowly— 3.5% in 2017, vs. 4.5% in 2016, per Moody’s Analytics projections.

In 2016, small homes have seen much sharper price growth than larger ones, and urban areas have appreciated faster than metro outskirts— and both trends are expected to continue in 2017 and brace yourself: Inventory has tumbled among less expensive homes, which means your money may not buy as much as you expect.

If you’re looking to trade up to a larger home, you’re in the housing market’s sweet spot, and the first part of 2017 should be a particularly good time to strike. Over the five years between 2011 and 2016, the average price on a two-bedroom house climbed 59% nationwide, while four-bedroom houses rose a more modest 41%, according to an analysis by Attom Data Solutions. Inventory has also risen at the higher end of the market, climbing almost 8% for homes in the $500,000 to $750,000 range.

But if you’re hoping to cash out and scale back—or if you’re a first-timer looking for a starter home—you face a tight market with low supply and greater competition from rival buyers.

Housing Starts Hit 9 Year High:

The Commerce Department showed that U.S. new-home construction jumped to a nine-year high in October driven by a strong pickup for single-family housing.

Residential starts surged 25.5 percent to a 1.32 million annualized rate, the fastest since August 2007 and exceeding the highest market projections. The increase from September was the biggest since July 1982. Multifamily-home building was also up, by a whopping 68.8 percent.

The figures indicate the housing market has been making great progress due to increased hiring and healthier finances that have been driving demand.

Single-family house construction rose 10.7 percent to an 869,000 rate, the highest since October 2007.

Permits, a proxy for future construction, increased 0.3 percent to a 1.23 million annualized rate. They were projected to fall to a 1.19 million pace, according to the survey median.

The National Association of Home Builders/Wells Fargo index of home builder sentiment in November held near the highest level of the year, figures showed on Wednesday. Readings greater than 50 mean more respondents reported market conditions as good. A measure of prospective buyer traffic rose.

Homeowners are Twice as "House Rich" as They Were 5 Years Ago:

America's housing market is heating up again, fortifying the finances of current homeowners and frustrating potential first-time buyers.

After hitting bottom in 2012, home prices took off dramatically before leveling off a bit in mid-2014. In the last two months, though, they turned higher again. The amount of equity homeowners now have — the value outside their mortgage debt — has doubled in the last five years, according to CoreLogic.

The latest read on September home prices showed a 6.3 percent annual gain, a touch bigger than August and a clear sign that prices are heating up again after cooling through much of spring and summer.

"Home-equity wealth has doubled during the last five years to $13 trillion, largely because of the recovery in home prices," said Frank Nothaft, chief economist for CoreLogic. "Nationwide during the past year, the average gain in housing wealth was about $11,000 per homeowner, but with wide geographic variation."

Homeowners today show more wealth on paper, but they are not extracting it at nearly the rate they did during the last housing boom. Near-record-low mortgage rates have certainly prompted thousands of borrowers to refinance and lower their monthly payments, but a very small share have extracted cash in these refinances and home equity lines of credit (HELOC).

So homeowners get richer, and those trying to become homeowners have to face not just higher prices, but a severe lack of homes for sale, especially at the entry level. There is clearly demand, just not enough supply.