HOUSINGNEWS REPORT
8 ECONOMISTS PREDICT 2018 HOUSING MARKET TRENDS
6. WHAT IS THE BIGGEST INTERNAL THREAT TO THE HOUSING BOOM AND WHY?
MCLAUGHLIN : New construction. We are in dire need of both new and existing inventory, and building the former helps the latter through a “chain-reaction” effect. A new home is bought up by someone who sells their existing one, which frees up another one, and so forth. If we don’t build enough homes, especially in some of our most productive regional economies, we risk pricing out an entire generation of homebuyers and slowing economic growth. KLEINHENZ : I don’t see this as a housing boom, rather as a less-than- normal housing market performance in a period of economic expansion. The expansion appears to be intact for another year or so, meaning that 2018 should see continued improvement in the housing market. GARDNER : Without a doubt, housing affordability is the biggest threat to the nation’s housing market. Home prices have been rising across much of the country at unsustainable rates and, although I still contend that we are not in “bubble” territory, it will represent the greatest impediment to the long- term health of the housing market. YUN : Tax reform is likely to marginally nudge the buying versus renting calculus so that the homeownership rate falls over time. That would be a pity because the end result will be greater inequality in wealth
“We are in dire need of both new and existing inventory, and building the former helps the latter through a ‘chain- reaction’ effect.” — MCLAUGHLIN “Without a doubt, housing affordability is the biggest threat to the nation’s housing market.” — GARDNER “I don’t see this as a housing boom, rather as a less- than-normal housing market performance in a period of economic expansion. The expansion appears to be intact for another year or so, meaning that 2018 should see continued improvement in the housing market.” — KLEINHENZ “The two biggest internal threats are limited inventory, causing prices to rise and locking up a new generation of home buyers; and … uncertainty that has the potential to reduce confidence in a market that has yet to truly return to normal standards.” — VILLACORTA
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JANUARY 2018 | ATTOM DATA SOLUTIONS
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