Ocean City Today

Growths predicted despite tax bill

Real Estate Report
By Lauren Bunting | Dec 28, 2017

(Dec. 29, 2017) Realtor.com released its 2018 National Housing Forecast in November and provided many insights for key housing indicators.

Mainly, it explained how inventory constraints that have fueled a sharp rise in home prices and caused difficulty for buyers to gain a foothold in the market will begin to ease next year as part of broad and continued market improvements.

It further explained that the easing of the inventory shortage, which is expected to result in more manageable increases in home prices and a modest acceleration of home sales, is being predicted based on developments first detected by realtor.com late this summer.

The annual forecast also foresees an increase in millennial mortgages and strong sales growth in southern markets. The wildcard in 2018 will be the impact of tax reform legislation currently being debated in Congress.

Housing Trends for 2018:

1.  Inventory expected to begin to increase –The majority of this growth is expected in the mid-to-upper tier price points, which includes U.S. homes priced above $350,000. Recovery for starter homes is expected to take longer because their levels were significantly depleted by first-time buyers.

2.  Price appreciation expected to slow – Home prices are forecasted to slow to 3.2 percent growth year-over-year nationally, from an estimated increase of 5.5 percent in 2017. Most of the slowing will be felt in the higher-priced segment as more available inventory in this price range and a smaller pool of buyers forces sellers to price competitively.

Entry-level homes will continue to see price gains due to the larger number of buyers that can afford them and more limited homes available for sale in this price range.

3. Millennials anticipated to gain market share in all home price segments – Millennials are on track to gain mortgage market share in all price points, due to the sheer size of the generation. Millennials could reach 43 percent of home buyers taking out a mortgage by the end of 2018, up from an estimated 40 percent in 2017.

— Lauren Bunting is a licensed Associate Broker with Bunting Realty, Inc. in Berlin.

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