The Bay Area is projected to lead the U.S. for home price gains in 2017 according to Realtor.com's 2017 National Housing forecast. Nationally home prices are forecast to grow by 3.9%. Western states are projected to lead the market at 5.8%. Home price gains in San Francisco and San Jose are expected to be double the national rate at 8.41% and 8.26% respectively. The TriValley should fall somewhere in the 6-7% range in most cities. In 2016, home price appreciation in the TriValley was 7%. Inventory increased by 11% but the number of homes sold dipped by 3%. Housing affordability has become an issue. As home prices increase, some buyers will be priced out of the market. Interest rates have been fluctuating between 4.125 and 4.5% over the last couple of months. Most analysts are predicting the interest rate will be 5% by the end of the year. Buyers are definitely out shopping for homes. Last weekend open houses were very busy. I think we will see a very robust spring market this year as buyers try to get ahead of the next interest rate increase.