HOUSINGNEWS REPORT
8 ECONOMISTS PREDICT 2018 HOUSING MARKET TRENDS
GARDNER : Interest rates continue to baffle forecasters. The rise that many of us have predicted for several years has yet to materialize. As it stands right now, my forecast for 2018 is for interest rates to rise modestly to an average of 4.4 percent for a conventional 30-year fixed- rate mortgage — still remarkably low when compared to historic averages. ZANDI : Mortgage rates are headed higher in 2018 as the economy is at full-employment and wage and price pressures are slowly developing. Deficit-financed tax cuts will put more pressure on the Federal Reserve to normalize short-term interest rates, which in combination with larger deficits will put upward pressure on long-term rates, including fixed mortgage rates. The 30-year fixed rate loan will have a rate of well over 4 percent by year-end 2018. Limiting the increase is continued low long-term rates overseas as the European Central Bank and Bank of Japan continue to purchase long-term bonds. YUN : Most definitely higher. Likely to average 4.5 percent in 2018 because of the combined impact of rising inflation, fed rate hikes, and some unwinding of the Fed balanced sheet. VIVAS : The realtor.com forecast expects mortgage rates to see 3 to 4 increases in the coming year, averaging 4.6 percent throughout the year, and reaching 5.0 percent by the end of 2018 due to stronger economic growth, inflationary pressure, and monetary policy normalization.
stick with his predecessor’s approach to monetary policy, including the continuation of gradual interest rate increases. MCLAUGHLIN : Mortgage rates are headed upward in 2018, likely between 4.2 percent and 4.3 percent. If the economy continues to crank along like it has, there’s even more room for
growth, especially if the Fed gets more aggressive with rate hikes.
KLEINHENZ : Given the amount of liquidity in the global financial system, long term rates such as those on mortgages will increase marginally (0.25 percent or so over the next year).
“Mortgage rates are headed higher in 2018 as the economy is at full-employment and wage and price pressures are slowly developing. Deficit-financed tax cuts will put more pressure on the Federal Reserve to normalize short-term interest rates, which in combination with larger deficits will put upward pressure on long-term rates, including fixed mortgage rates.” — ZANDI
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JANUARY 2018 | ATTOM DATA SOLUTIONS
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