Home shoppers may have it easier in 2018. Inventory constraints of for-sale homes and rising home prices may finally start to ease next year, according to realtor<\/a>.com\u00ae\u2019s 2018 National Housing<\/a> Forecast.<\/p>\n \u201cNext year will set the stage for a significant inflection point in the housing shortage,\u201d says Javier Vivas, director of economic research for realtor.com\u00ae. \u201cInventory 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.\u201d<\/p>\n But the big wild card for 2018 will be any impact from the proposed tax reform legislation, which is currently being debated by Congress, realtor.com\u00ae adds.<\/p>\n Here\u2019s a closer look at realtor.com\u00ae\u2019s five housing prediction trends for 2018:<\/p>\n 1. Inventory to start increasing: <\/strong>Realtor.com\u00ae projects positive year-over-year inventory growth by the fall of 2018\u2014which will be the first time since 2015. \u201cInventory declines are expected to decelerate slowly throughout the year, reaching a 4 percent year-over-year decline in March before increasing in early fall, after the peak home-buying months,\u201d realtor.com\u00ae notes in its report. The cities expected to see inventory levels recover first are Boston; Detroit; Kansas City, Mo.; Nashville; and Philadelphia. The majority of this growth will be in the mid- to upper-tier price points (which includes homes priced above\u00a0$350,000). On the other hand, recovery in the starter home market likely will linger since levels are \u201csignificantly depleted by first time buyers,\u201d realtor.com\u00ae notes.<\/p>\n 2. Price appreciation to slow: <\/strong>Home buyers likely will see home prices moderate in the new year. Realtor.com\u00ae forecasts home prices to slow to a 3.2 percent growth year over year nationwide. For comparison, home prices in 2017 posted a 5.5 percent increase. The majority of the slowing price appreciation will be centered in the higher-priced ranges as more inventory becomes available. Entry-level homes, on the other hand, likely will continue to see price gains due to a larger potential buyer pool as well as a more limited number of homes available for sale in this price range.<\/p>\n 3. Millennials to gain market share: <\/strong>Finally, the long-held predictions may hold true. Millennials may reach 43 percent of home buyers taking out a mortgage<\/a> by the end of 2018, up from an estimated 40 percent in 2017, realtor.com\u00ae projects. The largest cohort of millennials are expected to turn 30 in 2020. “Millennials are a driving force in today’s housing market,” Vivas says. “They already dominate lower price home mortgage and are getting close to overtaking older generations for mid- and upper-tier mortgages. While financially secure in general, their debt to income ratios have started to increase as they compete for higher priced homes.”<\/p>\n 4. The South to lead<\/a> in sales growth: <\/strong>Realtor.com\u00ae forecasts that Southern cities will top national averages in home sales growth in 2018. Markets like Tulsa, Okla.; Little Rock, Ark.; Dallas; and Charlotte, N.C., are expected to be the highest performers.\u00a0 Sales in these markets are predicted to increase by 6 percent or more. Nationally, sales growths are predicted to grow by 2.5 percent. \u201cThe majority of this growth can be attributed to healthy building levels combating the housing shortage,\u201d realtor.com\u00ae notes in its report. \u201cWith inventory growth just around the corner, these areas are primed for sales gains in years to come.\u201d<\/p>\n 5. Tax reform wild card: <\/strong>Tax reform could dampen 2018 sales and price forecasts, realtor.com\u00ae reports. The U.S. House has passed a tax bill,\u00a0and the Senate likely will vote on one soon. \u201cWhile the ultimate impact of tax reform will depend on the details of the plan that is finally adopted, both versions include provisions that are likely to decrease incentives for mobility and reduce ownership tax benefits,\u201d realtor.com\u00ae reports. \u201cOn the flip side, some taxpayers, including renters, are likely to see tax cuts. While more disposable income for buyers is positive for housing, the loss of tax benefits for owners could lead to fewer sales and impact prices negatively over time with the largest impact on markets with higher prices and incomes.\u201d Read more: Tax Reform Proposals Threaten Homeowners and REALTORS\u00ae Square Up After House Passes Tax Bill<\/p>\n Source: realtor.com\u00ae<\/em><\/p>\n<\/div>\n Realtors <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"![\"\"](\"https:\/\/i0.wp.com\/realtormag.realtor.org\/sites\/realtormag.realtor.org\/files\/rmo_files\/images\/2017_nov\/realtor.com%20chart.png\")
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