Finding the house of your dreams might seem pretty easy.You know what you want and like. You feel like you will know the perfect house when you see it. The minute you find “the one”, it will be
Real Estate Market Insights 2018
What's in store for the market in 2018? It's impossible to know for sure, here are the current trends to predict what may happen.
Home prices and values are expected to rise marginally. Home prices have increased around the country, with major metros like Dallas, Portland and Seattle experiencing the largest year-over-year gains. In fact, Washington state has experienced the biggest pricing increase in the United States over the last few years. The National Association of Realtors is anticipating the 2018 average home prices will rise by 3.5 percent, Freddie Mac predicts they'll increase 4.9 percent. The percentage may seem modest, but for cities such as Reno, Las Vegas, Phoenix and Sand Diego, rising home prices may continue the 2017 trend of creating more pressure in the market. The good news is home values in 28 states have risen to above pre-crisis peaks and are at an all time high.
Existing home sales have leveled off for the time being. Experts predict 2018 will spell more of the same for home sales. Most believe this is a result of interest rate increases in 2017, which may have reduced the purchasing power of many homebuyers. Home purchases are expected to rise a modest 2.8 percent or 5.8 million units. However, patience may pay off for potential buyers. While the combination of economic recovery, historically low mortgage rates and jobs growth, may have brought more interested buyers to the market, but inventory has been tight over the last few years. In response, homebuilding has been up and more new homes are expected to hit the market this year, increasing inventory for potential buyers. Many experts are predicting 2019 will be a buyers' market in some areas.
Will 2018 be a banner year for new homes? Many industry experts predict that new home sales will drive the market in 2018. A total of 1.33 million housing starts are expected in 2018, an increase from 1.22 million in 2017. While total home sales are expected increase 2 percent, new home sales are expected to rise 8 percent, reaching 670,000 sales.
What about mortgages? Mortgage rates have increased slightly over the last couple of years, but remain at historically low levels. Freddie Mac, the Federal Home Loan Mortgage Corporation, predicts an increase in the volume of mortgages which parallels other predictions signaling an increase in home sales. Refinance activity is projected to decline 25 percent. In the past, refinancing has dominated the mortgage market, with borrowers most often refinancing to shorten the term of the loan to pay off principals faster or to refinance out of an FHA loan into a conventional loan. Freddie Mac also predicts that more borrowers will tap into their home equity. With the increase in home values may prompt borrowers to use some of their equity to complete home improvement projects or pay off outstanding debt.
Sources: Kiplinger, Home Buying Institute, NAR, Realtor.com, CNBC, First Tuesday Journal, Business Insider, Freddie Mac, Fannie Mae, Buffini Co., M. Jory
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