HOUSINGNEWS REPORT
8 ECONOMISTS PREDICT 2018 HOUSING MARKET TRENDS
distribution in the country as fewer homeowners enjoy the rise in housing equity, while the renters see no equity gains. VILLACORTA : The two biggest internal threats are limited inventory, causing prices to rise and locking up a new
specifically millennials, to bring in more demand and raise the homeownership rate. Given the headwinds of student loan debt, relatively flat wage growth, and rising home prices, it’s hard to see this group being the savior for the housing market in 2018. First-time home buyers are a critical segment of the market needed to churn the rest of the market levels, and if they are unable or unwilling to engage, then there is a real threat that prices could retreat significantly to reel them back in. MUOIO : Affordability is one of the biggest internal threats to the housing market. After years of unabated price gains that have outpaced more stagnant wage growth, affordability is becoming a more prominent concern. While it may not pose an immediate threat to the housing market in 2018, this is something to monitor as prices continue to expand amid strained inventory levels. As previously discussed, rising interest rates and tax reform will also challenge affordability for more buyers in the coming years. It is worth noting that there is regional disparity when it comes to affordability concerns, as coastal markets are at greater risk. In addition to broadly weaker affordability prospects due to elevated prices, many of these markets are also threatened by pending tax reform. A number of California markets are notably vulnerable to deteriorating affordability, including San Francisco, San Jose, and Los Angeles.
generation of home buyers; and the aforementioned uncertainty that has the potential to reduce confidence in a market that has yet to truly return to normal standards.
Many have pointed to the resurgence of the first-time home buyer,
“Affordability is one of the biggest internal threats to the housing market. After years of unabated price gains that have outpaced more stagnant wage growth, affordability is becoming a more prominent concern. While it may not pose an immediate threat to the housing market in 2018, this is something to monitor as prices continue to expand amid strained inventory levels.” — MUOIO
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JANUARY 2018 | ATTOM DATA SOLUTIONS
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