The market in a nutshell
The 2017 housing market should close out with a better performance than last year, according to one industry expert. And with a strong economy and an improving job market in the works, 2018 could spell even better things to come down the line.
Existing, pending sales up
According to Lawrence Yun, chief economist for the National Association of Realtors, 2017 should end with about 5.54 million in existing home sales – a jump of nearly 2 percent over 2016.
In another positive move, NAR’s Pending Home Sales Index was also up for the year. The PHSI rose 0.2 percent from October and 0.8 percent since 2016. The PHSI, a “forward-looking indicator based on contract signings,” is at its highest point since June.
“The housing market is closing the year on a stronger note than earlier this summer, backed by solid job creation and an economy that has kicked into a higher gear,” Yun said.
Existing home sales also increased for the month – by 5.8 percent, reaching their highest level in 11 years.
So what does it all mean for 2018? According to Yun, signs are positive, but there are still some factors that could keep buyers out of the market.
“The strengthening economy, and expectation that more millennials will want to buy, serve as promising signs for solid home buying demand next year, while also putting additional pressure on inventory levels and affordability,” Yun said. “Sales do have room for growth in most areas, but nationally, overall activity could be slightly negative. Markets with high home prices and property taxes will likely feel some impact from the reduced tax benefits of owning a home.”
Inventory remains the single-biggest problem facing buyers today, Yun said.
“New buyers coming into the market are finding out quickly that their options are limited and competition is robust,” he said. “Realtors say many would-be buyers from earlier this year, stifled by tight supply and higher prices, are still trying to buy a home.”
At the end of the day, Yun said he expects existing sales to remain steady in 2018. Price growth should dip slightly to 2 percent.
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