What will 2018 bring to the housing and mortgage markets? Higher interest rates and scarce housing supply characterized 2017, much to the detriment of homeowners and eager buyers.
Looking forward to the new year, predictions of what may happen can determine if you will go to a loan officer here in Morristown to take out a loan or not and if you will purchase a home or not.
Rates Will Rise
Experts believe that interest rates will rise past 4 percent early in 2018. This rise comes from the Federal Reserve setting federal funds rate higher, and mortgage rates usually adjust according to the Treasury Yield.
Different experts believe mortgage rates will hit 4.5 or average 4.6 percent for 2018, but stay below 5 percent.
Dips May Happen Suddenly
In spite of this rise in rates, you can still expect volatility, which some experts expect themselves. Unless rates climb steadily, you can luck out if you lock on a mortgage rate during a dip in average rates.
You can even hope for rates to dip suddenly below 4 percent, and you can take the chance then as long as you closely monitor the market.
Homes Will Sell Later On
In other aspects of the market, predictions suggest that homeowners will take time to adjust to the new tax law. Home sales will then decrease at the beginning of 2018, but it will likely pick up later on. Wage growth will rise this year, allowing you more buying power.
Renters who missed their home purchase chance last year will probably be making their move as well.
Inventory Will Increase
Regarding housing inventory, experts hold on to modest optimism. Inventory may pick up for 2018, but only slightly if experts are correct. Reluctant sellers may be pushed to sell this year, and construction seems to have shifted from apartments to single-family homes.
With more single-family homes built for owning, you can have more homes to choose from.
You now have reason to hope for 2018, but you may need patience as well as cunning to purchase under favorable circumstances.