Despite some challenges with housing supply, this year has been the great for the U.S. economy, housing and mortgage markets. A combination of modest economic growth, robust job gains and historically low mortgage rates have cumulated in a favorable economic environment for the housing and mortgage markets.
- Robust job growth helps support buyer demand
- Historically low mortgage rates result in affordable mortgage payments
- Prices continue to rise because of low inventory and high demand
- Sales and housing starts are on track for their best year in a decade
Despite some challenges, Freddie Mac called 2017 the best year in a decade for housing and mortgage markets. The overall economy has created a favorable housing environment all year. Robust job gains are keeping homebuyer demand high, but the lack of wage growth is somewhat disappointing. Historically low mortgage rates, however, offset that a little and have been keeping mortgage payments affordable.
Lagging home construction has contributed to a lack of inventory all year, but sales and housing starts are still on track to have their best year in a decade, according to Freddie Mac. Home prices are also reaching new heights, recently surpassing their pre-recession peak. Lack of for-sale inventory and high demand have kept prices high, but growth will begin to taper off next year as construction and inventory pick-up.
Overall, the economy and housing market fared well in 2017. Looking forward, 2018 is primed to be a good year as well. Home price growth is forecasted to begin slowing down, which is a good sign for those who were worried about a potential bubble. Inventory is expected to pick-up late next year and buyer demand will remain strong as millennials are settling down to buy their first home.