2018 Market Insights: Looking Forward to a Prosperous Year
2017 wrapped up pretty well. Home prices were up about 6% year-over-year, as were median sales prices. Interest rates are still low and affordable to many, and the economic outlook for 2018 seems okay. As we finish up this first week of 2018 (and adjust to the bitter cold of winter), there’s a lot to look forward to in the months ahead.
2018: Second Verse, Same as the First
This year will likely bring us more of the same. Almost a “second verse, same as the first,” to steal from that revival by Herman’s Hermits.
⇒ There will still be demand that outpaces supply until those builders, seemingly inspired by the new tax code, can get some new inventory to market.
⇒ Credit availability should remain about where it is, if not improving slightly, as Freddie and Fannie look at FICO alternatives in credit scoring.
⇒ There are some indications that as the year progresses, we may see some increases in rates. These increases shouldn’t make too much of an impact on purchases by first time homebuyers—what it may do is keep more people in their current homes, unwilling to give up a lower rate.
⇒ A Trump-headed Consumer Financial Protection Bureau will likely be more financial services business-friendly. However, the changes to regulations already in place will likely be slow to come, if at all, in the mortgage area. More than one state AG or banking regulator has already indicated a willingness to step in where the CFPB might pull back. But mortgage regulation is not a real concern—lenders have adapted and there is very little impact on the consumer transaction.
Opportunity for Success in the New Year
There is opportunity out there in 2018 for the best REALTORS® and lenders to be very successful. We know the market. If rates remain reasonable, the market should only improve as new home inventory becomes available. That new inventory should alleviate some demand pressure and home prices should remain affordable for a large number of consumers.
It will be on us to make sure potential homebuyers get and stay interested in buying a home, and as many builders as possible commit to building homes to add to inventory. Embrace has the products, our industry leading Approved to Move™ program, and our guaranteed on-time closing offer to help make you successful this New Year.