Much of the real estate analysis is pointing to continued tight inventory in the spring. Winter can be a great time of year to buy if you are ready. It may also be the best opportunity for first-time buyers who also benefit from lower interest rates. Don’t be left sitting on the sidelines in 2018.
Low inventory across the country will continue to remain a challengefor homebuyers in 2018. Experts state that low new housing starts and soaring prices are keeping purchase numbers down. First-time buyers and millennials are the most impacted by the lack of affordable housing. As more homeowners see the difficulties of affording a new home in this climate, they may choose to stay in their current homes longer, which will also impact inventory. Based on a recent survey, Zillow predicts that the shortage of affordable homes will also push housing prices to climb more than 4% in 2018, exacerbating the problem and forcing millennials to remain renters.
Everyone has been talking about the tight inventory but I think we are OK calling it a straight-up inventory crisis at this point. We just don’t have enough homes.– Svenja Gudell, chief economist at Zillow
Rise in Interest Rates
Speaking of rising interest rates, economists at the MBA predict mortgage interest rates on 30-year fixed-rate loans to rise to 4.6% in 2018, and to more than 5% in 2019. The Federal Housing Finance Agency (FHFA) agrees that rates will hit the mid-4% range next year and mid- to upper 5% range by 2020.
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