An end to the shortage struggle?
The days of strapped housing inventory – and the higher prices that come along with it – may be numbered. According to Realtor.com’s 2018 National Housing Forecast, 2018 should mark a turning point for the nation’s longtime housing shortage.Verify your new rate (Jul 16th, 2020)
A potential pivot
According to the forecast, supply will increase in 2018. And with that rise, we’ll see “more manageable” home prices and a “modest acceleration” of sales.
“Realtor.com projects U.S. year-over-year inventory growth to tick up into positive territory by fall 2018, for the first time since 2015,” the forecast reports. “Inventory declines are expected to decelerate slowly throughout the year, reaching a 4 percent year-over-year decline in March before increasing in early fall, after the peak home buying months.”
Housing inventory bouncing back in key markets
The first markets to see inventory bounce-back should be Boston, Detroit, Nashville, Philadelphia and Kansas City, Missouri.
“Next year will set the stage for a significant inflection point in the housing shortage,” said Javier Vivas, Realtor.com’s director of economic research.
“Inventory increases will be felt in higher-priced segments after spring home buying season, which we expect to take hold and begin to provide relief for buyers and drive sales growth in 2019 and beyond.”
All in all, Realtor.com predicts 2018 will bring about a 3.2 percent jump in home prices. We should also see a 2.5 percent uptick in existing home sales, a 3 percent rise in housing starts and a whopping 7 percent increase in new home sales.
Mortgage rates should average about 4.6 percent, according to the report, and reach 5.0 percent by year’s end.
More Millennial mortgages
Realtor.com’s forecast also predicts more Millennial activity in the 2018 housing market. The segment should make up around 43 percent of all buyers by the close of 2018.
“Millennials are a driving force in today’s housing market,” Vivas said. “They already dominate lower price home mortgage and are getting close to overtaking older generations for mid- and upper-tier mortgages.
“While financially secure in general, their debt to income ratios have started to increase as they compete for higher priced homes.”
Thanks to more construction starts and a boost in supply overall, 2018 will also see growth in the Southern markets.
“Southern cities are anticipated to beat the national average in home sales growth in 2018 with Tulsa, Oklahoma; Little Rock, Arkansas; Dallas; and Charlotte, North Carolina leading the pack,” Realtor.com reports.
These Southern cities will see sales jump by 6 percent or higher, while the national growth rate will hover around 2.5 percent.
Get today’s mortgage rates
With more inventory hitting the scene, 2018 is a better time than ever to buy a home. Shop around and see what mortgage rates you qualify for today.Verify your new rate (Jul 16th, 2020)