Still the first quarter of the year…still more real estate market trends for 2018 from a group of housing experts.
The Housing Inventory Cupboards will NOT be Bare.
Experts predict that Fall 2018 will be the first time since 2015 that there will be a net inventory in housing. Though inventories may be tight through the beginning, spring and summer, Detroit, Boston and Nashville are thought to be the first cities to see actual inventory increases.
New construction will likely drive the influx of properties in Q3 and likely that new construction will be in upper and mid-tier price ranges starting at +$350,000. The National Association of Home Builders has repeatedly said that those upper and mid-tier price ranges are caused by increased land and material costs and by increased costs and low supplies of labor.
Danielle Hale, chief economist for realtor.com, believes that there will be “…a leveling of supply and demand despite there being an average increase of +3.2% in home prices”
Mortgage Rate Increases
Economists from the Mortgage Bankers Association (MBA) predict that interest rates will hit 4.6% in 2018 and then rise to 5% in 2019 and 2020. Core Logic predicts that a 30-year sixed rate mortgage averaging 4% in 11/2017 will increase to 4.70% by 12/2018. If Core Logic were correct, this 4.7% rate would be the highest mortgage interest rate since 2009.
Increased Demand for Home Equity Loans
TransUnion’s latest report indicates that 10M consumers will originate home equity lines of credit between 2018-2022. This 10M figure is double the amount of consumers who originated home equity loans from 2012-2016.
Freddie Mac also indicates that more homeowners will borrow against the equity in their home though this lender is not pinning itself down with specific numbers and percentages.
Effects of the New Tax Cuts and Jobs Act
Nothing is certain at this point, though we are seeing clues, but the TCJA could most definitely influence the number of homes for sale, the prices of homes for sale and migration patterns of people moving from one state to another.