Home Prices
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 Florida, building has been booming the past year. Housing starts in the U.S. hit their highest level in longer than a year in November, thanks largely to a spike in single-family home construction in the South and West.
Interest Rates
Most experts predict that rates will rise in 2018 and we have already seem them climb here in the past few weeks. 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.
Credit
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.”
If you’re considering building a new home or even remodeling don’t wait, Contact Cianci Construction today.