Are you looking to buy or sell a property in the next year? Wondering what the new year will bring to the housing market?
Here are some real estate market changes to keep an eye out for in 2018.
Supply Will Catch Up with Demand
The beginning of 2018 will continue to have inventory shortages. In March, there will be a decline of year over year inventory by about 4%. The number of houses available will remain tight over the summer.
By Q3, the market will see considerable real estate market changes with an influx of houses and a catch up with the demand. The increase in inventory will be a change for many potential buyers, who have been frustrated with the lack of selection and options.
Fall will be the first net inventory gain since 2015. Some of the hottest real estate markets around the country, like Detroit, Nashville, and Boston, will be the first to see the increase in inventory.
New construction is driving these increases in inventory across the country. First-time home buyers looking to get into a starter home may have a longer wait. Most of the new inventory will be created at the upper and mid-tier price ranges – $350,000 and above.
If you’re in the market for a new home but still searching for the perfect house, you can get prepared while you wait. By checking your credit score and making a few other key decisions about your property, you’ll be ready to go when you find that perfect home.
Prices will continue to increase, but at a slower pace. Home prices will increase by approximately 3.2%
Millennials Continue to Dominate the Housing Market
Millennials are the largest group of home buyers in the U.S. market. Despite the fact that over 50% of them carry student loans, millennials are starting to have more success taking out loans at varying prices.
Since 85% of all millennials view buying a home as a good financial investment, they’re very motivated to buy.
It’s estimated that millennials could make up almost 43% of home buyers by 2018 as they begin to have children and advance in their careers, which results in a 3% increase from 2017.
Millennials shouldn’t wait to buy those houses. With changes in financial and economic policy, including interest rates, mortgage rates are expected to hit 5% in 2018.
Southern Real Estate Markets Are Heating Up
2017 brought a spike in real estate purchases in the Midwest. 2018 is expected to see that same spike in the south. Cities, like Little Rock, Arkansas, Tulsa, Oklahoma, Charlotte, North Carolina, and Dallas, Texas, will grow close to 6% compared to the national average of 3.2%
The South has been enticing large corporations to move their headquarters to their temperate climates. The low cost of living and lower state sales taxes are tempting offers for many organizations. As a result of corporations relocating, these areas have seen a boom in both household and economic growth.
The recently passed tax bill will impact the real estate market. The exact impacts are yet unknown. Experts believe that the changes to mortgage interest deductions and a new distinction between current and future homeownership may cause some additional real estate market changes. It would impact both the number of homes for sale and declining home prices.
Homes in the higher price tiers would be the most affected and those higher priced real estate markets, like California.
Navigate 2018 Market Changes with a Reliable Lender
If you’re looking to buy a new home in 2018, selecting a reliable lender is a great first step. The right lender will help you navigate some of these changes to make the best home purchase for you and your family.
Our team at 7th Level Mortgage would love to help. Give one of our loan specialists a call to discuss a mortgage that’s right for you!
7th Level Mortgage is a leading one-stop mortgage company providing deeply informed, custom-tailored assistance with every phase of each mortgage transaction. If you are searching for a home loan in New Jersey, Pennsylvania, Virginia, Delaware, Maryland, New York, or Florida, please contact us today so that we can determine the best Mortgage Lender to place your loan with and get you the best possible rate and program.