We’re back with our special “The Year Ahead,’ all about what 2018 might mean to you, your home and all your real estate investments.
And we’re going to wrap up the show with our annual look at what the experts are saying about the new year, and try toanswer the big question: where will you be in one year?
First of all let’s look at the value of your home.
We have some good news for you there. Prices in most parts of America are expected to keep rising in 2018. The reason, is that there aren’t enough homes for sale, but there are still plenty of buyers out there. So the laws of supply and demand are in your favor, if you own a home, or plan on selling one.
NAR believes that by this time next year, the median price of a home in the USA will rise by more than 5%….. And that’s good news for home owners, who will have even greater equity in their homes and investment properties. And that increased equity will translate to greater household wealth.
It will also benefit home sellers, who will see those profits at the closing table. So when they sell, and buy another place, they will be able to afford that next home more easily.
Now, that low inventory, and rising prices are expected to create challenges for home buyers….especially first time home buyers.
But as we’ve been saying, those buyers do have factors in their favor….for one thing most mortgage lenders are allowing lower credit scores and lower down payments…..and home buyers in 2018 will enjoy low interest rates. Now, yes – interest rates have started to rise. They’re at right around 4% right now….and by the end of 2018? They might be roughly a half point higher than that. So while the days of record lows may be behind us, the rates will continue to be between 4 and 5%…not huge jump, and hopefully not a barrier to homeownership.
Also, experts believe there may be some really good news for buyers coming down the line – there might be more homes on the market. More choices, less competition….and that added inventory should help those rising prices – slow down a bit.
You see, new home construction is on the rise. The United States Census Bureau reports that Total housing starts will average 1.27 million units in 2018, a 5.6% increase from 2017. That’s up there, from the slump they had after the downturn. Not up there all the way, since they ordinarily would be putting up a million and a half homes – but up is up and new home construction is headed in the right direction.
So buyers who hang in there- they might do OK….especially if they end up getting a home of their own. It would make 2018 a great year….and even better if they’re moving from renting to buying…because rents are expected to continue to rise throughout 2018.
Now – of course, there’s one big variable on the horizon….tax reform. So far, we still don’t know exactly what that will mean to you – if you own real estate, if you’re buying real estate, or if you’re selling property in the coming year.
So with that being said…with prices, interest rates, mortgage availability and inventory all looking as though they’ll be somewhat better, there are some positive developments on the way.
By ths time next year – when we take another look at the year ahead – we’ll know for sure – where we all stand, as homeowners, buyers and sellers.
My guess? If there’s anything in tax reform that hurts real estate – NAR will wek relentlessly to fix it. To make sure that in every year ahead – homeownership remains a priority from sea to shining sea.