Whether you plan to be actively engaged in the 2018 real estate market or not, knowing where the market is headed is important for almost everyone. With 2017 just wrapping up, exact numbers on the year aren’t available but overall 2017 showed strong numbers with home prices up around 6% over 2016 at the end of September and interest rates remaining low through year end.
As 2018 kicks off, expect to see positive growth continue in the real estate market in most areas. Home prices are still expected to rise in 2018 but at a slower rate than the last couple years. Mortgage rates are expected to rise as the year progresses and could possibly reach 5% by year’s end. If you do want to buy a home in 2018, the sooner the better to take advantage of the low rates that are still available.
Many people have wanted to buy homes in recent years but the inventory, especially in homes that traditionally appeal to first time homebuyers, hasn’t been available. This year should change that as we get to the end of the year. It may take until fall to see growth in inventory levels but by year end things should tip in that direction offering more homes in all price ranges as inventory shakes down across the board.
Millennials were a huge portion of the 2017 homebuyers, almost 40% and will continue to play a significant role in 2018. They have established themselves career wise now and with the economy strong, many are well positioned to take on larger mortgages and not have to wait for the homes that typically appeal to first time homebuyers.
New home construction will play a significant part in the inventory shift in 2018. Based on recent building permit applications, new home starts in the single-family sector of homes will likely see growth top 8% providing lots of new homes to the market in 2018. As new homes are available in all prices, inventory will open up across the board as homeowners move up or down to meet their needs and leave existing homes that will become available in larger numbers.
Most news tends to look positive, but home affordability will take a hit if both home prices and mortgages rates rise as anticipated. While this isn’t welcome news, the anticipation of higher available inventory will give people options that weren’t available in 2017 and hopefully minimize the effects of this.
Because of rising prices in recent years and continued growth expected, new home equity lines of credit are expected to soar as more than 60% of current homeowners are expected to have enough equity in their homes to qualify.
No matter what your situation in 2018, overall news is positive. Even if you don’t buy or sell this year, having homes around you appreciate at a steady rate will keep the market strong for when you are ready for your next transition. For additional information regarding the real estate market, I will be happy to answer any questions you may have, help you to find your dream home or determine the value of your existing property
Image courtesy of deedster/pixabay.com