Interest rates will go higher.
Prediction – Mortgage rates will end 2018 at 4.5%. I think the Fed will be cautious and I think rate hikes will come at a snail’s pace in 2018.
Events have held the Fed to small rate increases in 2017.
My guess is the Fed will hike rates slowly and nominally in 2018.
Home prices will continue to rise.
Prediction – Home prices will gain 4.8%. Low inventory, steady demand and improved economic conditions will push home prices up in 2018.
Data released last week showed prices up 7.1% year over year for 2017.
The price increase rate will slow in 2018, with slightly higher inventory.
Home sales will increase.
Prediction - The number of existing home sales will remain at the same levels as 2017 as prices continue to rise and interest rates remain historically low.
Through year end, inventory was down 8.0% year over year and the number of sales is down slightly for the previous year.
Inventory starts anemically low, rising in early Spring, pushing above that of 2017 and buyer activity will remain about the same as 2017.
Home affordability is declining.
Prediction – Wages have been increasing about 2.4% per year and I expect it to continue at about 2.3% for 2018.
Inflation will be a minor factor for 2018.
Home affordability will decline to about 21%, only slightly lower than 2017.
It looks like 2017 unfolded somewhat as expected and there does not appear to be significant change for 2018.
We have some concerns – Inventory, Interest Rates, Tax Reform Plan, World Economy and “Washington D.C” to name a few.