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Predictions for Housing in 2018

Posted by Lori Rezac on Jan 23, 2018 11:41:32 AM

lori_2018HousingPredictions.jpgAs we head into a new year, a look back at 2017 shows us that it is incredibly difficult to predicate the housing market. The experts predicted that 2017 would see rising interest rates, moderate price growth, and an increase in new construction. What happened was nearly the opposite. We continued to struggle with a lack of inventory causing prices to increase, and mortgage rates stayed low through the year. With the impact of the new tax bill still being determined, predicting 2018 will be especially difficult.


Mortgage rates are expected to stay around 4 percent in 2018, according to an article on Historically, movements in the short-term interest rate have corresponded with movements in mortgage rates. The correlation between these two has been put into question as the Fed raised interest rates 3 times in 2017 with little impact on mortgage rates. Experts believe we will end the year around 4.5 percent.


Housing experts continue to look at millennials and how they are responding to the housing market. The demand from this demographic is expected to continue to increase as many are now getting married and having children. Even those still single are more likely than previous generations to buy a home, according to the article.


Experts believe the lack of inventory we have been experiencing will continue to impact the housing market into 2018. They do expect this to improve moderately since the current situation is unsustainable. They also expect price growth to continue, but at a slower rate than what we saw in 2017. Housing has experienced 23 consecutive months of increases driven by low interest rates, low unemployment, and continued economic growth. We should see these factors start to shift in 2018.


Predicting the 2018 Housing Market

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