New homes are predicted to become a “primary driver of sales in 2018,” as 1.33 million housing starts are predicted next year-up from 1.22 million in 2017, as outlined by Freddie Mac’s September Outlook report, which gauges future real estate activity. Total home sales are anticipated to rise around 2% from 2017 to 2018, as reported by the report.
Housing Forecasts for 2018
Economists also predict that the uptick in housing starts, in conjunction with a reasonable boost in mortgage rates, will assist slow the run-up in home prices the coming year. Freddie Mac forecasts a 4.9% improvement in home prices in 2018, less than the 6.3% growth seen up to now this present year. Mortgage rates are likewise up from near-record lows in 2016, prompting predictions that refinancing s will fall to 25% of mortgage activity in 2018-the lowest share since 1990, as per Fannie Mae.
Still, homeowners likely will continue building equity the coming year. In the second quarter of 2017, the dollar amount of equity cashed out was $15 million, up $1.2 million from the first quarter. As home prices rise, cash-out activity also has been rising, too.
“The economic environment remains favorable for housing and mortgage markets,” says Freddie Mac chief economist Sean Becketti. “For several years, we have had moderate economic growth of about two percent a year, solid job gains, and low mortgage interest rates. We forecast those conditions to persist into next year.”
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