(11/1) As 2017 winds down, our attention turns to the upcoming new year and speculating on what it might bring. With an overall growth of the market in 2017, will next year follow suit, regress, or just stand its ground?
Each Location Is Different
The trends and forecasts discussed here are based on a national scope. Each housing market is different depending on local demographics and economies. Be sure you speak with a qualified real estate professional in your area to discuss the specifics of
whatís happening where you live and how that affects the current of future value of your home.
Contributing Factors To The Housing Market
Thereís a lot that goes into predicting how the housing market will fare, and even expert analysts get it wrong each year. Population growth is just one factor, albeit a big one, that can determine what housing prices will be, as well as what sort of supply and demand will occur.
Baby boomers downsizing their homes is another factor to consider, a trend that will likely continue for the next ten years or more. This could lead to a surplus of larger-sized homes and a lack of large families that want to buy them.
The economy also plays a role, with statistics like unemployment and consumer confidence signaling where things are headed. A growing economy generally leads to more home buyers, all else being equal.
As you can see, too many x factors exist, making it hard to make accurate predictions, but here are some things to look out for in the next 12 months.
Slowdown Likely, But Still Growth
Look for 2018 to spell growth for the housing market, just not at the pace it did in 2017. Thatís not such a bad thing, as it's hard to maintain such high levels of growth. However, it may be an indication of an impending decline in the following years.
Interest Rates Will Rise
Interest rates are scheduled to rise, but not by a lot according to the Feds. They are standing by their prediction that the interest rate will steadily increase into
2018 after being drastically lowered in 2009 to curtail the Great Recession.
Interest rates play a huge part in the number of new mortgages. If it looks too unappealing to take out a mortgage to pay an inflated price on a house many potential homeowners may opt to wait it out.
Renting On The Rise
The rental market will see a rise again in 2018 after experiencing an uptick in 2017, as housing prices stay at high levels. This is a trend that has its start as early as 2015, and will likely continue until housing prices return to more affordable numbers.
Those with the ability to purchase an investment property would be encouraged to do so, since there should be a surplus of rental candidates. There are still good real estate deals to be had in most areas, with homes that need a little fixing up before being rented out. The rental payments can pay off the mortgage, taxes, and maintenance
expenses essentially building equity for the investor.
More Millennials Buying Homes
Millennials will likely continue the trend of buying their first home. Thereís a recent strategy being employed that uses the equity from their parentís home to pay in cash, then getting refinanced after the deal is
done. This enables them to buy houses they otherwise wouldnít be able to by being an all-cash buyer.