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Depleted Housing Market to See Inventory Growth in 2018

THIS POST WAS ORIGINALLY PUBLISHED ON THIS SITE Click Here To Read Entire Article

SANTA CLARA, Calif., Nov. 29, 2017 /PRNewswire/ — Inventory constraints that have fueled a sharp rise in home prices and made it difficult for buyers to gain a foothold in the market will begin to ease next year as part of broad and continued market improvements, according to the realtor.com®2018 National Housing Forecast released today by the online real estate information and services destination.

Realtor.com’s 2018 housing forecast

The easing of the inventory shortage, which is expected to result in more manageable increases in home prices and a modest acceleration of home sales, is being predicted based on developments first detected by realtor.com® late this summer. The annual forecast, which is among the industry’s bellwethers in tracking and analyzing major trends in the housing market, also foresees an increase in millennial mortgages and strong sales growth in Southern markets. The wildcard in 2018 will be the impact of tax reform legislation currently being debated in Congress.

“Next year will set the stage for a significant inflection point in the housing shortage,” said Javier Vivas, director of economic research for realtor.com®. “Inventory increases will be felt in higher priced segments after spring home buying season, which we expect to take hold and begin to provide relief for buyers and drive sales growth in 2019 and beyond.”

Realtor.com®Forecast for Key Housing Indicators

Housing Indicator

Realtor.com® 2018 Forecast

Home price appreciation

3.2% increase, enabling a sales pickup

Mortgage rate

Average 4.6% throughout the year and reach 5.0% (30
year fixed) by the end

Existing home sales

2.5% growth, low inventory trend starts to reverse

Housing starts

3% growth in home starts; 7% growth in single family home
starts

New home sales

Increase 7%

Home ownership rate

Stabilize at 63.9% after bottom in Q2-2016

Five Housing Trends for 2018

1.    Inventory expected to begin to increase – In August, the U.S. housing market began to see a higher than normal month-over-month deceleration in inventory that has continued into fall. Based on this pattern, realtor.com® projects U.S. year-over-year inventory growth to tick up into positive territory by fall 2018, for the first time

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