The national housing market is expected to see an overall improvement in 2018 in terms of increasing inventory, a slowdown in the rise of home prices and more opportunities available for borrowers. With millennials now making up the largest group of consumers in the United States, the market is bound to see an influx of millennial buyers in 2018 as well. These real estate trends to watch for in 2018 go into more detail about what home buyers, sellers and owners can expect this year.*
- Home prices increasing more slowly. While home prices are still expected to increase in 2018, they are expected to do so at a slower rate than they have in the past two years. According to the Federal Housing Finance Agency, home prices rose 6.3 percent in 2016 and about 6 percent in 2017. In 2018, the median forecast is for a 4.1 percent increase in existing home prices across the country.
- More home construction. Experts expect single-family home construction to rise in 2018—data that has been garnered based on existing building permit applications. Specifically, single-family housing inventory is expected to rise about 8 percent in 2018.
- Rising interest rates. As the Federal Reserve addresses inflation this year, interest rates are expected to rise, which will affect mortgage rates. Some in the industry predict that mortgage rates will rise between 0.25 percent and 0.5 percent in 2018. The 30-year fixed mortgage is estimated to average 4.7 percent in December 2018, compared to 4.01 percent in November 2017.
- An increase in lending opportunities. Banks are now offering more diverse loan products, opening the market to more and different types of buyers. This is a trend that is expected to continue in 2018. In addition, some specialty lenders are now focused on nontraditional mortgages targeted toward people with various types of credit issues.
- Vacation home sales growing. With the recent tax reform bill putting more cash at the hands of wealthier Americans, vacation home purchases may increase in 2018. This consumer confidence could cause homeowner interest to turn toward second homes/investment properties for those who can afford them.
- Millennial buyers dominating the market. Millennials currently make up a large portion of the buyer market, especially those purchasing their first homes. This demographic is interested in a variety of living options, from tiny homes to co-living situations, meaning real estate agents are adapting to cater to millennial preferences.
- A focus on short-term rentals. With apps like Airbnb proving more popular than ever, buyers are looking for opportunities to make money off of short-term rentals—from renting out a single room in a home to renting entire spaces. The ability to access a global pool of renters via technology is pushing people to branch out in terms of their real estate investments.
As agents adapt to changes in the market each year, these real estate trends to watch for in 2018 will shape the way that they cater to the evolving demands of their clientele. To keep up with what’s going on in real estate both nationally and locally this year, continue to follow the Ryan Roberts Realtor blog! For your real estate needs in Auburn, Opelika and Lake Martin in 2018, contact Ryan today at 334-750-9872 or email [email protected].
*These points reflect trends of the national real estate market as a whole and may vary when applied to a local perspective.