What the 2018 housing market will bring ~
Because the tax bill was passed after the real estate entities put out their 2018 forecasts, their projections below don’t include what impact, if any, several provisions in the bill — such as the caps on the mortgage interest and property tax deductions — will have on the market. Some experts are anticipating prices won’t rise nearly as fast because of the new law. Others say it will help first-time home buyers enter the market.
Here is a brief roundup of their forecasts and what they expect the major trends to be in the coming year:
National Association of Realtors predicts home prices will rise about 5 percent in 2018. “Low supply is pushing prices higher. The Good news is Home prices are predicted to continue to improve.
The biggest impediment to sales is the shortage of supply in relation to overall demand. The lagging pace of new-home construction in recent years is further creating a logjam in housing turnover. “The lack of inventory has pushed up home prices by 48 percent from the low point in 2011, while wage growth over the same period has been only 15 percent.
The National Association of Realtors anticipate that mortgage rates will gradually climb with the 30-year fixed-rate average reaching 4.5 percent by the end of 2018.
Entry-level homes will continue to see price gains because of the large number of buyers and limited number of homes for sale. With few houses on the market, homes will sell faster than ever.
Home prices will continue to rise but at a more modest pace. Zillow company surveyed 100 economists and housing experts who projected prices to increase 4.1 percent in 2018.
Mortgage Bankers Association predicts mortgage rates will slightly increase in the coming year “As far as rates are concerned, 10-year Treasury yields are forecast to increase in 2018, The MBA estimate that mortgage rates will reach the 5.0 percent level by the middle of 2018, but rising only slightly beyond that to average 5.3 percent in 2020.”
Mortgage applications will be fueled by purchases rather than refinances in the coming years.
“Our forecast for 2018 is that we will see continued growth in the Housing Market.
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Thank you for reading!
Bob Idakaar GRI