What to Expect in Housing Market in 2018 – Episode Two

Thanks for checking out our blog.  Last month we discussed two upcoming near future housing trends to expect nationwide in 2018. Today we are going to discuss two more trends to expect according to most market experts.

Mortgage Rates are Headed Up 
Mortgage rates are expected to rise in 2018. Interest rates hovered around 4% for the majority of 2017, which gave many buyers relief from rising home prices and helped with affordability.  In the first quarter rates have increased from 3.95% up to 4.45% and experts predict that rates will increase even more by the end of the year.  CoreLogic, a data provider for the real-estate industry, averaged six forecasts of mortgage rates, arriving at a consensus view that the 30-year fixed will average 4.7% in December 2018.

The rate you secure greatly impacts your monthly mortgage payment and the amount you will ultimately pay for your home.  Don’t let the prediction that rates will increase stoop you from purchasing your dream home this year.  Let’s take a look at historical view of interest rates over the last 45 years.  Bottom Line – Be Thankful that you can still get a better interest rate than your older brother or sister did ten year ago, a lower rate than your parents did twenty years ago, and a better rate than your grandparents did forty years ago.

More Equity for Homeowners 
As home values rise, homeowners gain equity.  Over the next five years home prices are expected to appreciate on average by 3.35% per year and to grow by 24.34% cumulatively , according to Pulseconic’s most rest Home Price Expectation Survey.

So what does this mean for homeowners and their equity position?

As an example, let’s assume a young couple purchases and closed on a $250,000 home in January of 2018.  If we only look at the projected increase in the price of that home, how much equity will they earn over the next 5 years?  $44,905 over the next five years!!

These are two more housing trends expected in 2018 according to most market experts.  If you’re a home buyer wanting sound advice on your next investment or a Seller wanting to get the biggest return on your current investment give us a call today for a free consultation at 956-307-4544.  We look forward to hearing from you.