Newsletter - January 2018
Happy New Year from Blue Streak Docs!
Last year was quite a whirlwind for the U.S. housing market (at times, literally a hurricane!), but by most accounts, it was a good one. In a December report, Freddie Mac called 2017 “the best year in a decade by a variety of measures.”
What will 2018 bring for buyers, sellers, investors, and real estate professionals? Let’s see what the experts are predicting:
Home prices will continue to rise, but at a slower pace. Realtor.com projects home prices to slow to 3.2% growth (compared to 5.5% in 2017) as more inventory becomes available. Cities like Detroit, Nashville, Philadelphia, and Kansas City, MO, will see their inventory recover first, they predict - particularly in the $350,000 and higher range.
Existing home sales will increase, but new home sales (especially starter homes) will increase even more. “We have a huge generation entering the market,” said Zillow Chief Economist Svenja Gudell. “They really want to be homeowners, and they’re faced with an inventory crisis that leaves them with few options. Builders won’t ignore this hungry market, and we’ll start to see a rise in new construction at the more affordable end, instead of all the luxury buildings we’ve seen lately.”
The South will lead the country in home sales growth, with markets like Tulsa, OK and Little Rock, AR boasting a growth rate of 6% or more compared to the national average of 2.5%.
The homeownership rate will stabilize at 63.9%. Trulia predicts that homeownership will continue to rebound thanks to Gen Xers re-entering the market and Millennials becoming first-time buyers. Realtor.com forecasts that 43% of mortgage originations will be by Millennials (up from 40% in 2017).
Mortgage rates will average 4.6% this year, but are expected to reach 5% before 2019 - and the Mortgage Bankers Association predicts rates will continue to rise over the next few years.
Mortgage delinquencies will fall to record lows, a trend that will be driven by strong employment and rising home prices. “From a credit performance standpoint, mortgage loan delinquencies are the biggest story,” said Matt Komos, Vice President of Research and Consulting for TransUnion. “Serious mortgage delinquencies are expected to decline materially [in 2018], reaching levels not seen since 2005 when TransUnion began tracking these metrics.”
The new tax bill could throw a monkey wrench into all of it. While no one knows for sure what effects - if any - the bill will have on the mortgage and housing industries, experts say it lowers the incentive to buy a home with its caps on mortgage interest deduction and state and local taxes. The National Association of Realtors predicts the bill will cause home values to drop by 10% - a stark contradiction to Realtor.com’s projection that they will rise by 3.2%.
“The initial effect will likely slow home sales as buyers and sellers try to figure out what it means,” said economist Mark Zandi. “It will affect where people decide to live and expand and start businesses. It makes the Northeast, especially around New York, less competitive.”
As with all things, time will tell. But if there’s one thing we learned from 2017, it’s that we should be prepared for anything! Blue Streak Docs can help you protect your portfolio with our nationwide document retrieval services and comprehensive property title search reports. If you haven’t worked with us yet, give us a try and get your 5th order FREE!
Employee Of The Month
“We are so lucky to have this outstanding employee - Jackee Olson - here at Blue Streak Docs. Jackee consistently excels at everything she does. Whether she is searching or helping out in other departments, she is always ready, able and willing to do whatever is necessary for the greater good of the department and/or the company as a whole. She is a joy to work with making others’ jobs so much easier with her at our side. We couldn’t be more thrilled that you were this month’s winner Jackee! We thank you for your high production and excellent work ethic.”