Generalized predictions from Realtor.com and Freddie Mac for 2018 real estate include
– More manageable increases in home prices
– A modest acceleration in home sales
– More Millennials joining the ranks of home owners
– Significant increases in new home sales
Let’s look as some specifics.
According to Realtor.com’s director of economic research, Javier Vivas, “We are forecasting next year to set the stage for significant inflection point into the housing shortage. Inventory increases will be felt in higher priced segments…we expect to see inventory increases take hold (throughout the residential market) and provide relief for first time home buyers and drive sales growth…”
1. Home price appreciation at approximately 3.2% – this is a slower rate of increase than we’ve seen in the recent past and this increase may allow home sales to pick up as well.
2. Mortgage rates are predicted to average approximately 4.6% throughout the year and then reach 5.0% by the end of the year.
3. Existing home sales are predicted at +2.5%
4. Housing starts are predicted at 3%
5. Single family home starts are predicted at 7% y/y
6. New home sales are predicted at 7%, same rate as single family home starts
7. Home ownership rate predicted to stabilize at 63.9%
Freddie Mac 2018 predictions include
1. The total share of home refinances expected to fall to 25%, the lowest annual share since 1990
2. Home price growth at 4.9%
3. Housing starts up to 1.33M in 2018 as compared to 1.22M in 2017.