If you’re thinking about buying a new home in the New Year, congratulations! We certainly hope you’ll consider one of our Elite neighborhoods. But no matter where you buy, and whenever you’re ready to buy a new home, it’s important to have a sense for how the housing market looks. Though it’s still unclear what impact recent tax reforms will have, we’ve researched reports from Forbes and Realtor.com to bring you these housing market predictions for 2018.
Home prices have been rising steadily since the housing market crash that started back in 2008. According to the Case-Shiller Index, prices have been rising about 5% to 6% per year on average over the last two years. Most pundits believe prices will continue to rise, which is good for the market. Forbes stated, in a recent article titled 5 Things to Know About the 2018 Housing Market, “While no one can predict the future, we think it’s quite likely that home prices will continue to rise gradually in 2018. This appears to be one of the least volatile periods in the history of the Case Shiller Index. We think that is an indicator of a healthy market.” Realtor.com echoed that prediction, noting “As the market eases, home prices are expected to slow to 3.2% growth year over year nationally.”
While this is good for the market and good for sellers, it may benefit those who are buying to make a move sooner rather than later. As home values and prices continue to rise, it may not be wise to wait to buy.
Supply & Demand
Realtor.com predicts that, after three years of a “crushing shortage of homes for sale… the shortfall will finally ease up in the second half of 2018.” They credit this turnaround to “bullish construction… the engine that’s turning this ship around, bringing new homes to the market and creating opportunity for people to trade up into new homes.” Here in Louisville, according to the Greater Louisville Association of Realtors (GLAR), while housing inventory remains low (particularly when it comes to starter homes), people are still buying homes. Dave Parks, president of GLAR, said he expected 2017 to end with home sales being up 2.5 percent over the prior year, according to a story on InsiderLousiville.com. Parks said the Louisville MSA would likely continue to see home sales rise in 2018. “People are continuing to buy in the Louisville area, in part, because of continuing low-interest rates and affordable home prices,” Parks said.
At Elite Homes, we’re absolutely bullish on new construction. We have plenty of homes available right now with nine communities scattered throughout East Louisville, including a variety of home choices for all types of buyers.
Most experts predict that rates will rise in 2018. Freddie Mac’s Primary Mortgage Market Survey shows that interest rates for a 30-year mortgage have hovered around 4%. But groups like the Mortgage Bankers Association, Fannie Mae, Freddie Mac and the National Association of Realtors all project that rates will increase by this time next year. If you’re thinking about buying a new home, keep in mind that an increase in rates will impact your monthly mortgage payment. The longer you wait, the more expensive your mortgage will become.
After the housing market crash in 2008, new regulation and a changing mood in the lending industry brought an end to looser lending criteria. Lenders have tightened their criteria, which has limited the number of prospective borrowers who can be approved for a loan. According to the Forbes article, “We believe it is likely that lending standards will be relaxed in the near future, allowing some of these reasonably credit qualified people to enter the market.”
The Good News
Here at Elite Homes, we believe that 2018 will be a good time to buy a new home. Interest rates remain low, making it an excellent time to purchase. And with home values on the rise, it really does pay to own your home.
Check our website to see our selection of beautiful new homes available throughout the Louisville area — or visit one of our neighborhoods and take a tour through our models. We would love to show you around and show you how easy it is to buy your new home with Elite!