Inventory shortages still plague the housing market, according to about 60% of brokers questioned in RISMedia’s Power Broker Survey. And while many forecasts predict inventory will pick up again late next year, much of that initial growth will come in mid- or high-priced homes.
- 60% of brokers said inventory is still a huge problem
- Inventory will pick up again in the latter half of 2018
- Supply shortage is most profound in lower-priced homes
- Home prices and mortgage rates will rise throughout 2018
“We are forecasting next year to set the stage for a significant inflection point in the housing shortage,” says Javier Vivas, director of economic research for realtor.com. “Inventory increases will be felt in higher-priced segments after home-buying season [in the fall], which limits their impact on total sales of the year.”
While inventory is expected to pick up, the mid- and high-tier homes will see that relief first. For many buyers looking at starter homes, unfortunately, supply shortage and affordability problems may persist into 2019.
Homes prices are forecasted to continue rising throughout next year, but at a reduced pace. They are expected to grow 5.5% between now and the end of 2018, according to the National Association of Realtors.
Mortgage rates are expected to rise out of the historic lows they have been hovering around. The MBA expects interest rates to reach upwards of 5% by the 2019.
Millennial homeownership may also begin to pick up next year. The increase comes as more millennials are landing in well-paying jobs and starting families. They are expected make up 43% of all buyers in 2018, up from 40% this year.
For more predictions on the real estate market in 2018, check out these game-changers.