Newly-constructed supply will be coming to the market during 2018 but it will be met by ever increasing demand from owner-occupiers and investors.
That’s one of the five key trends for the US housing market according to analytics firm HouseCanary which also highlights affordability concerns.
Its latest report from Alex Villacorta, EVP of Analytics, predicts that house sales will go up, noting that since 2003 household growth has increased 13.5% while sales are roughly the same.
For prices, the analysis suggests that while the overall trend is higher, hyperlocal fluctuation within markets is expected to become more prevalent during 2018. Expect markets to be more nuanced by zip code.
Affordability stretched, mortgage rates rising
HouseCanary’s report says that there could be a section of the population who will become long-time renters as housing affordability is pressured further.
As prices continue to rise, while wages lag, a further increase in mortgage rates will squeeze household budgets further.
Although the report does not expect a mortgage rate of 5% or above – with the current 4.75% more likely – it warns that many homeowners may be dissuaded from selling if they are on a low-rate that would be lost.
With concerns remaining about the impact of tax reforms and uncertainty about the global economy, the report concludes that knowledge will be increasingly important for homebuyers, who will want to have all the available tools to buy a home that is most likely to retain its value in the future.
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