Industry experts have declared that instability created by the Great Recession and housing market crash of the late 2000s is now behind us. With more job openings and millennials making big career moves, the only place to go in 2018 is forward.
The biggest, most pervasive trend kicking off the new year is a truly healthy housing market. Observers note that the industry has reached its strongest point in roughly 30 years, with housing prices on par with the pre-housing boom years and economic growth expected to increase 2.7 percent by the end of 2018. With these factors framing our field of view for the next 12 months, expect a combination of the following factors.
Higher Home Prices
According to statistics from the Federal Housing Finance Agency, home prices rose 6.3 percent in 2016. That pattern is expected to continue in 2018, with a 4.1-percent climb nationwide.
Experts contend that year after year gains could make purchasing a home unaffordable for many, causing another source of strain. To pick up the pace, job and salary increases are likely needed to close a disparity that has existed since the Recession.
New construction is already anticipating this demand, especially for single-family homes. It’s predicted that about 912,500 more single-family homes may be on the market by the end of 2018, further diversifying the options for those looking to buy. Although the market feels restricted right now, economists believe it’ll open up and reach its full potential by fall 2018.
More Sales for Existing Homes
Before new construction officially takes off, resales are expected to see even more gains, rising 2.5 percent over the course of 2018. Stemming off this, sales from new homes are predicted to go up seven percent for that same period. In either case, according to Realtor.com, Southern cities will be fueling a bulk of the change.
Higher Mortgage Rates
Based on statistics from CoreLogic, rates for 30-year fixed mortgages are predicted to finish at 4.7 percent by December 2018. While not large, it’s a small gain over the end of 2017, which ended with 4.07 percent for such programs. Overall, experts believe the mortgage industry will see its highest rates since a low in 2011.
A Break from Tradition
With the above factors considered, more individuals seem poised to purchase a home and make the move from renting. In response, lenders realize this demand and have started offering a range of less-traditional programs. In addition to your conventional, FHA and VA loans, interest-only and non-qualified mortgages – or loans requiring limited income documentation – may help potential buyers make this transition. At the same time, lenders have been loosening their credit standards, factoring in a person’s Recession-era financial situation and personal recovery rather than outright rejecting certain potential borrowers.
With this shift, 2018 looks like the perfect opportunity to purchase a custom home from one of By Carrier’s communities. To learn more about our properties or to schedule a personal tour, give us a call today.