11 Things to Know About the 2018 Housing Market
Arch Mortgage Insurance Company released its Housing and Mortgage Market Review for the winter of 2018, and chief among its findings is “it’s premature to worry about a housing bubble.”
Home Prices Will Increase
Arch Mortgage anticipates that home prices should rise by 2 to 6 percent each year because of strong demand and smaller supply.
When home shopping see why it’s important to note which way the windows face and other smart tips.
Lower End of Housing Might Benefit While Higher End Hurt
With changes to the standard deduction, the mortgage interest deduction no longer serves as a big factor since fewer people will itemize their taxes. Lower taxes for those who don’t itemize could stimulate demand in lower-cost markets, the report said. At the higher end, prices could grow but at a slower rate. However, there are some areas where price declines could take place because price growth and population growth are already weak, the report said.
Housing Will Become Less Affordable
The HaMMR predicts that affordability will be hurt because of rising interest rates and home prices. It urges those potential first-time homebuyers to enter the market sooner rather than later.
Mortgage Rates Will Increase
The Fed is already saying it will have to raise interest rates three to four times in 2018 and 2019 after it raised rates in December.
Worried about taxes on a home? Check out what you need to know about the mortgage interest deduction.
People Will Stay Put
With rising rates people aren’t going to want to move to a new place because their rates will likely be better. This in turn means they’ll likely look to renovate properties.
Thinking about renovating? Discover the renovation project that will return the most on your investment, it might surprise you.
Expect Urban Areas to Get Denser
Arch expects more people to flock to urban areas based on several factors. The HaMMR report cites a decline in young people getting driver’s licenses and co-living trends expanding.
If your apartment is too spartan for your tastes, there are ways to make an apartment feel more like home.
Policy Changes Will Stimulate Demand More Than Supply
The HaMMR predicts that tight lending guidelines will loosen a bit and increase demand. But help on the supply side will be limited.
Don’t forget to ask about the utility bills when house hunting. Find out the other things first-time home buyers shouldn’t forget.
Purchase Originations Will Grow
The HaMMR expects purchase originations to increase 10 to 15 percent each year as wage growth starts to pick up. The Mortgage Bankers Association predicts a $1.2 trillion increase in purchase originations for 2018 alone.
There are a lot of costs that come prior to buying house, see which costs to prepare for when house hunting.
Construction on the Way
Arch said in the HaMMR that single family home construction will grow between 5 to 10 percent a year. With such a housing shortage, construction is anticipated to grow for several years.
Need to hire a contractor for a project. Finding the right one isn’t as easy at doing a Google search, see what to look for when hiring a contractor.
Variation in Home Prices
The HaMMR suggests that the desirable areas near downtowns or those with natural scenery will see the biggest price growth.
Make sure you thoroughly scout the neighborhood before buying a home. Check the neighborhood crime rates and meet the neighbors.
Construction Costs Rising
Builders are facing a tough time to find workers, which is making construction take longer. Some builders claim that new regulations are shooting up the prices of homes. The National Association of Home Builders reported that from 2011 to 2016 the price of a home increased around $65,000 to $85,000 because of regulatory costs.
It’s that and a short supply of houses that have driven up home prices 40 percent in the last five years, according to Lawrence Yun, chief economist of the National Association of Realtors.
Make sure to get that home inspection when looking for a home, you’ll want to avoid the sight of any horror scenes like these.