Each year, there are basic things we can infer about the housing market before they happen. One thing that is relatively easy to predict is whether or not it’s a buyer’s or a seller’s market. We can also predict how certain economic events will likely affect the housing market throughout the year. Of course, no one ever truly knows what’s going to happen but often, there is a general consensus around what is likely occur. For 2018, this is what’s forecasted:
Prices will soar
According to Zillow, home prices are expected to increase 4.1%. This is 1.1% higher than the normal annual percentage. Realtor.com predicts that home appreciation will rise 3.2% in 2018.
Interest rates are going up
For those looking to enter the housing market and purchase their first home just know, interest rates are on the rise. In fact, interest rates are due to rise between 2.5-7%, depending on whether the home is new or an existing construction.
High demand, low supply
In 2017, we saw record low inventory in the housing market. The influx of demand for new homes in 2018 will push housing prices up and shrink inventory even more.
Millennial’s are driving demand
Millennial demand for new homes is on the rise as many are now purchasing homes at the same rate as their parents. Born after 1980, many millennials are getting married and starting families. Single millennials are also contributing to this trend as they are more likely to purchase homes as a single person versus previous generations.
Home construction is going back-to-basics
Home construction picked up towards the end of 2017 and we will continue to see that in 2018. However, we won’t see just any new home construction. Higher demand for homes will trigger the construction of entry-level homes, in particular. The focus will be centered on these homes for their low barrier-to-entry and the demand for lower prices.
Style still reigns supreme
When it comes to buying a home, style rules everything and baby boomers along with millennials are driving that style. Developers are building homes with designs that will appeal to both older and younger generations and include features like wider hallways – because they can fit both strollers and wheelchairs.
Minimalist living is getting more popular
Minimalism as a movement will drive smaller home living in 2018. This trend is one that is forecasted to continue for several years as individuals adjust to living in more overpopulated areas and want to live a more simple life.