When 2017 kicked in, housing market experts have released their forecasts on how the US housing will be performing.
Experts and analysts predicted that there would be rising mortgage rates in 2017. Some of them agreed that it would rise past the 4 percent mark and would even grow beyond 4.5 percent. There was some truth to this prediction as interest rates surpassed 4 percent in the first half of 2017. However, mortgage rate rolled back a few percentage points in May.
While housing professionals gave a positive comment on the construction of new residential properties for this year, it seemed that the construction industry still lacked steam. And although there were around 950,100 new privately owned housing units authorized for construction since the beginning of the year up to September, many states in the country still suffers from low home inventory.
US housing affordability also suffered gravely this year. The shortage of homes has contributed to the rise of real estate prices all across the US. According to The Agenda, inventory of home sales continued to shrink for the past 24 consecutive months.
2017 is now coming to a close. We’ll be saying hello to another year. Speaking of which, how will the 2018 Housing Market be like?
Real Estate Economy will have Some Patchy Time, yet Economic Foundation Remains Strong
According to AZcentral, the foundations real estate economy remain positive due to benign mortgage interest rates and increased number of employment curbing the country’s unemployment rate. However, 2018 will be a patchy time for the industry. The planned tax reform of the present administration may impact the housing industry negatively. This will have a direct effect on the mortgage interest rates and property-tax deductions.
Nov 2017 Pre-owned Home Sales Reaching Highest Level in more than a Decade
Bloomberg, in a report, also cited specific graphs and charts which show the housing momentum as we enter a new year. One of these charts is the Hot Home Demand from the National Association of Realtors:
This drastic increase in existing-home sales is seen by economists as mostly driven by the upper end of the market. The sales included large single-unit homes and condominium purchases. View full report here.
Looks like a Good Year for the Non-QM Market
The Non-QM market is expected to double or even triple next year, S&P Global Ratings said. The Non-QM products today aren’t just the new subprime of today. S&P collected and analyzed data to see just how huge the market is. According to the result, consumer confidence on Non-QM performance will continue to flourish in the coming year. “We expect the non-QM market to double, or even triple, in size in 2018. We also think that as it continues to evolve and become more liquid, securitization will become more efficient and spreads should tighten,” S&P added.
S&P has released this prediction for 2018: “Given improved underwriting, ostensible off-setting risk factors, and wide spreads, it appears as though non-QM lending should give rise to a healthy new market that provides funding for would-be borrowers who have been on the sidelines for years, having been unable to qualify for a conventional loan.”