Though thermometers in the Midwest and East are displaying temperatures typically seen in the dead of summer, calendars show that 2018 is not-so-slowly creeping up on us. And while the 2017 residential real estate market has been a mixed bag of higher prices, quick sales and low inventory, agents may not know what to expect in 2018.
Freddie Mac recently released its outlook for next year, which shows favorable conditions, including an increase in purchase mortgage volume, a decrease in refinance activity and growth in home prices.
“The economic environment remains favorable for housing and mortgage markets,” said Sean Becketti, Freddie Mac chief economist. “For several years, we have had moderate economic growth of about 2 percent a year, solid job gains and low mortgage interest rates. We forecast those conditions to persist into next year.”
While there were 1.22 million housing starts in 2017, Freddie Mac expects that number to increase to 1.33 million in 2018, which, along with slight increases in mortgage rates, will reduce price growth. Prices are expected to grow 4.9 percent in 2018 compared to 6.3 percent growth experienced in 2017 through August.
Increased mortgage rates also will drive down the refinance share of mortgage activity, dipping 25 percent next year to the lowest annual share since 1990, according to Freddie Mac.