As spring arrives, so to does the hottest time of year for the real estate market.
Spring isn’t just for deep cleaning and groundhogs. Historically, it’s the time of year the real estate market heats up. Read on to learn more about our predictions for the year ahead.
Market At a Glance
According to Realtor.com, on average housing prices show positive and negative signs compared to 2017. Nationwide, the median sale price for a home is up 8% . The number of days that homes stayed on the market was down 7% as was housing inventory.
The market is still suffering from an inventory shortage. This issue is particularly relevant to the entry-level-market. Indeed, starter home inventories have not increased in over seven years. Low supplies are expected to drive prices higher and motivate sellers to sell. While mortgage rates were somewhat static in 2017, they are expected to rise over the coming year. Real estate website Redfin predicts that more than 30 percent of homes listed in 2018 will sell within two weeks of hitting the market.
The tax bill recently signed into law by President Trump will have a direct impact on the real estate market. Among the effects is that it is now more expensive to buy or own a home in a high price or high tax location. Millennials, weakened financially by high rents and crushing student debt will face difficulty. The young market segment are likely to suffer setbacks in saving for sizable down payments or affording mortgages of any kind. Furthermore, with the rapidly rising prices for homes, even minute increases in mortgage rates can and will outprice young buyers.
Financial advisers and industry insiders agree that mortgage rates will finish slightly ahead of last year, between 4% and 4.5%. However, volatility among rates is a real possibility. Greg McBride of Bankrate.com predicts rates ““dipping below 4% at least once, spiking above 4.5% and closing the year around 4.5%.”
To learn more about how these trends can affect your decision to buy or invest, contact Home Qualified today.