Real Estate Home Prices To Cool In 2018 Soft Landing Projected For
Current Record Housing Boom

Real Estate Home Prices To Cool In 2018 Soft Landing Projected For Current Record Housing Boom

Real Estate Home Prices to​ Cool in​ 2018 - Soft Landing Projected for​ Current Record Housing Boom
The five-year boom in​ existing and​ new housing sales in​ many U.S .​
housing markets is​ expected to​ cool in​ 2018 but final results should still be second best in​ history, according to​ projections by top industry economists .​
National average home price appreciation is​ also expected to​ slow from an​ unsustainable rate of​ 12.7% this year to​ about 5.0% next year.
Existing home sales, increasing 4.8% this year to​ a​ record 7.11 million, are projected to​ decline 3.5% to​ 6.86 million in​ 2018 .​
New home sales will increase 8.0% to​ 1.3 million this year and​ are expected to​ decline 4.6% to​ 1.97 million next year.
We are in​ the​ process of​ setting a​ fifth consecutive annual record for​ both existing and​ new home sales, said David Lereah, chief economist for​ the​ National Association of​ Realtors (NAR) .​
The market will be coming off a​ five-year boom and​ will experience a​ soft landing next year .​
An uptrend in​ mortgage interest rates will cause some slowing of​ the​ sales pace but we forecast 2018 to​ be the​ second highest year on record .​
Housing will continue to​ support the​ overall economy .​
The market is​ entering a​ period of​ transition in​ which we will see a​ somewhat slower but more sustainable pace of​ home sales .​
This will create a​ better balance between home buyers and​ sellers.
HouseHunt’s national Current Market Conditions survey, taken in​ the​ third quarter of​ this year, is​ in​ concert with the​ latest industry projections .​
It found that the​ current housing market momentum is​ being fueled by unprecedented buyer demand, strong sales and​ price appreciation, strong job and​ population growth and​ relatively low mortgage rates.
The survey also found that its taking a​ bit longer for​ homes to​ sell and​ that the​ inventory of​ unsold homes appears to​ be building in​ all but the​ most active markets .​
Another significant indicator of​ market strength is​ that 80% of​ home sellers are getting 95-100% of​ asking prices.
Lereah noted: Baby boomers remain in​ their peak earning years and​ their children, the​ echo boomers, are just entering the​ period of​ life when people typically buy their first home .​
His primary concerns about an​ otherwise rosy market outlook were the​ emergence of​ exotic, interest-only mortgage loans and​ the​ threat of​ the​ home mortgage interest deduction being eliminated or​ diluted by tax reform legislation in​ Congress.
Housing Industry News Briefs
The Pending Home Sales Index, a​ leading indicator of​ future home sales, eased slightly to​ a​ reading of​ 128.8 in​ September but is​ still at​ its second highest level since its inception .​
An index of​ 100 is​ equal to​ the​ average level of​ contract activity during 2001, according to​ NAR.
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An estimated three of​ four buyers today use the​ Internet to​ search for​ homes, and​ those using the​ Internet are more likely to​ work with a​ real estate professional than those who do not, according to​ Cathy Whatley, a​ former NAR president .​
The hardest task Internet buyers face is​ to​ negotiate a​ successful purchase agreement with sellers who frequently receive multiple offers often exceeding list price and​ then bring the​ transaction to​ a​ successful close.
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Rising mortgage interest rates will not affect most homeowners in​ the​ U.S., according to​ the​ Mortgage Bankers Association .​
The trade group’s research showed that 35% of​ homeowners own their homes outright; 50% have fixed rate loans, with many refinancing to​ get lower rates in​ the​ past few years; and​ 15% have adjustable rate loans .​
Eight percent of​ the​ latter homeowner group are high income earners .​
Therefore, the​ MBA concludes, only seven percent of​ all mortgages are rate sensitive!
The MBA research also found that only 12.5% of​ homeowners spend 50% of​ household income on housing .​
Only 33% spend just over 30%.
In the​ past 12 months, the​ U.S .​
population grew by 2.9 million persons .​
Between now and​ the​ year 2015, demand for​ new homes is​ on track to​ total as​ many as​ 20 million units annually .​
By 2030, there will be 80 million more people living in​ the​ U.S .​
As a​ result, our housing needs will require that an​ average of​ two million units per year is​ built but our record for​ building is​ 1.1 million .​
Currently there are 74.8 million homeowners in​ the​ U.S.
Finally, the​ MBA reported that no state in​ the​ U.S .​
has ever recorded a​ year-to-year decline in​ housing prices .​
Current national median price is​ $220,000, an​ increase of​ 15.8% over last year.

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