In 2017, the housing market got hotter, prices increased, inventory stiffened, and mortgage rates hardly budged. The real estate market is undoubtedly one of the most significant factors of the economy’s stability. And there are countless of queries about what to expect or where it is going next.
But what can we expect this 2018? Whether you are looking to sell or buy a property, or even hunt for the perfect rental, knowing what you are up against can positively help. For some teasers, check out the list below of what to expect from the real estate market this 2018:
Property Prices May Slow Down
Well, it is certainly good news for first-time property buyers. Experts predict that home prices in 2018 may slow down or decelerate after a couple of years. According to the FHFA (Federal Housing Finance Agency), home rates increased 6.3% in 2016 and exceeded 6% in 2017 as well.
However, for 2018, the median prediction among lender groups and six industry is for 4.1% growth in prevailing home prices nationwide. So why the gradual decrease? One determinant is home construction. Business analysts strongly believe that the development of single-family houses will ascend in 2018, derived from the building permit applications.
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There will be More Properties for Sale
More and more people are scrambling to hunt for houses or homes for sale. The scarcity is specifically drastic for those houses that most first-time buyers get. There are many reasons as to why shortages happen.
First, a lot of boomers (baby boomers) are glad to age in their current homes rather than downgrading. Lots of investors purchased millions of properties after the housing bubble burst. Thus they are making a lot of money as property owners. Lastly, home builders make more money from high-priced houses than basic houses.
But there is something to look forward to this 2018. Economists predict that there will be more houses for sale in 2018, specifically in the fall of 2018.
Housing Demands for Millennials will Soar
More and more millennials will start to buy a place of their own. But still, the real estate market will hand out some challenges, but there are plenty of opportunities available for them. As millennials age, they’re incomes grow as well. Thus, they can take out bigger mortgages.
Experts predict that 43% of property buyers in 2018 will most likely come from the millennials, which is 3% higher than the estimated percentage last year, derived on mortgage originations. That small increase can mean thousands of new homes.
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Homes will be Less Affordable
Since mortgage rates and home prices will most likely escalate in 2018, the affordability of homes will decline as well. Say for example, if the mortgage rates go up to 4.7% at the end of the year, and the median financial value of current home increases by 4.1%, then the monthly debt payments for a specific house would increase significantly.
Home prices and interest rates went up, so homebuyers should get prepared. It will be going to be more costly to purchase a home over the course of 2018.
More Home Equity Line of Credit
As property values increases, householders acquire equity. As such, banks strongly believe that many homeowners will borrow money against that equity. According to a recent study conducted by TransUnion, they predicted that around 1.6 million people would acquire a new home equity line of credit (HELOC) in 2018, which is a 16% growth over 2017.
The credit bureau claims that 80% of those homeowners have high credit scores, and 67% of those borrowers have ample equity to acquire HELOCs. TransUnion also predicts that about 10 million people will get a home equity line of credit from 2018 to 2022. But even so, it is still important to seek advice from any financial firms such as Ashe Morgan to know what is best for you.
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Knowing what to expect in the housing market forecast for this 2018 can be especially valuable than making baseless guesses. It is more significant to know facts that suggest what will happen next. Still, nevertheless, 2018 may still be tough and challenging, specifically for property buyers. Read the article above to know more.