The final numbers won’t be in for another month, but 2016 has been a good year for real estate. Leaders in different areas of real estate each saw it a little differently, but all agreed that low interest rates helped more than anything to fuel the Nutmeg State’s busy residential real estate market.

“The lending industry benefited from a good rate environment in 2016,”said Kevin Moran, senior vice president and manager of retail mortgage lending at Webster Bank. “Brexit had a good impact on mortgage interest rates and we saw a little unexpected uptick in refinancing as well. It wasn’t long-lived, but it was appreciated by lenders.”

However, that could change next year, when rates are expected to rise.

“It remains to be seen how things will shake out in 2017, but at some point we expect rates to rise and that will be a challenge after having the luxury of low interest rates for so long,” Moran said. “When they start to move back up, it will be a very different environment. On the other hand, uncertainties around the world, like international crises could drive money back into the bond market and keep rates lower.”

The low rates also contributed to the high number of sales Connecticut saw throughout the year, said Michael Feldman, outgoing president of the Connecticut Association of Realtors.

“Interest rates are still unbelievably low, somewhere around three and a half percent,” Feldman said shortly after the presidential election. “Homebuyers can enjoy a 30-year loan for as long as they’d like to keep it, or lower if they went with a 15-year loan.”

TRID Is Good News After All

The much-anticipated, much-lamented implementation of the TRID “Know Before You Owe” rule went much more smoothly than expected, and in fact had a positive impact on the market.

“Buyers now have advance notice of what their closing costs are going to be instead of finding out at the closing,” Feldman said. “Consumers are much better informed by this transparency and that’s a very good thing.”

Moran said preparation was the key to the smooth implementation of TRID, which he said has been fantastic for consumers.

“Certainly in the first part of the year, there was a lot of wrestling with the mechanics and cost,” Moran said. “As we got through the middle of the year, we saw lenders got their arms around it. Most lenders have been able to incorporate TRID into their turn time. We’ve certainly learned a lot. The Connecticut Mortgage Bankers Association is still doing a lot of seminars. That’s a big part of the story, education around TRID for our members and the Realtor community.”

One of the best things to happen to the Connecticut real estate market was actually something that didn’t happen.

“The legislature did nothing to impede, restrict or slow down the real estate market, which is one of the key factors of a good economy,” Feldman said. “Overregulation is not a good thing in the market. Things stayed where they should have been.”

The continued decline of home foreclosures has helped the market as well, said Jim Czapiga, president and CEO of CATIC.

“The number of foreclosures over the last few years has continued to decline, allowing for better inventory balance,” he said. “It has helped stabilize the market and will help stabilize pricing over time. Sales increases usually precede price increases and volume has picked up. Starter homes are zipping through the market and people who are pricing their houses well are selling them quickly.”

Moran said the growth in his industry’s online presence has been good and bodes especially well for the expected influx of Millennial homebuyers into the market.

“The year started with the growth of online lending as a big story,” Moran said. “A lot of lenders are looking at that and mobile banking as a start of gaining market share. Of course, the Millennial market is expected to be the largest demographic and we need to make certain that we’re reaching those folks. That’s how the Millennials will be doing business.”

Looking Ahead to 2017

Czapiga said he expects a strong 2017.

“Everyone I’ve spoken to still has a pretty steady pipeline of closings through the end of the year,” he said. “We’re expecting a solid fourth quarter and expect it to continue into the spring. I’m always cautiously optimistic, but I have a better feeling about next year than I have in other years.”

Moran said he thinks 2017 will see a renewed focus on first-time homebuyers, especially Millennials.

“That will be a challenge to bring them into the market,” he said. “The long-term perspective is that cohort is expected to be the biggest chunk of new household formation. There’s a basic inherent desire to own a home. It’s been a difficult period which we’ve only recently started to come out of. There’s starting to see a modest growth in income. It’s been a challenge and an opportunity for the industry.”