HOUSINGNEWS REPORT
8 ECONOMISTS PREDICT 2018 HOUSING MARKET TRENDS
1. WHAT WILL BE THE MOST IMPORTANT HOUSING MARKET TREND(S) IN 2018 AND WHY?
ZANDI : The Trump tax cuts will have a significant impact on housing markets in 2018. Most significantly, it means that house prices in parts of the country where homeowners rely on the mortgage interest deduction and property tax deduction will come under significant pressure. This includes the Northeast corridor, south Florida, Chicago, and the west coast. Nationwide, house price growth will slow in 2018 to the low single digits, but could fall in some of these regions. YUN : It will be interesting to see how the tax reform fallout of diminishing mortgage interest and property tax deductions impact the upper-end market, especially in high-taxed states. Perhaps the impact is significant, with more sellers willing to unload, or it could be minimal as the stock market wealth and tax cuts for the wealthy more than make up for any extra burden of not able to deduct the full amount. The lower-end market will barely notice any changes arising from
the tax reform as the ability to deduct would not change.
much of the growth concentrated in the Southern markets. We also expect inventory declines to slowly decelerate throughout the year, but the easing of the shortage will vary greatly by market and price tier. Also, we expect millennials to gain market share, going from 40 percent of all mortgages in 2017 to 43 percent in 2018, largely due to the sheer size of what is now the largest generation in U.S. history.
VIVAS : Nationally, 2018 could set the stage for an inflection point for housing. For the last two and a half years, we’ve seen prices rise and inventory drop at unsustainable levels. In 2018, we’re predicting more manageable increases in home prices and a modest acceleration of home sales compared to this year, with
AVERAGE U.S. HOMEOWNERSHIP TENURE (YEARS)
9.00
Q3 2017 8.19
8.00
7.00
6.00
5.00
4.00
Q1 2009 4.14
3.00
2.00
1.00
0.00
Q1 2000
Q1 2002
Q1 2004
Q1 2006
Q1 2008
Q1 2010
Q1 2012
Q1 2014
Q1 2016
Q1 2017
“The Trump tax cuts will have a significant impact on housing markets in 2018.” — ZANDI
“Nationally, 2018 could set the stage for an inflection point for housing.” — VIVAS
“It will be interesting to see how the tax reform fallout …(will) impact the upper-end market.” — YUN
“One of the biggest market trends for 2018 will be lack of inventory.” — VILLACORTA
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JANUARY 2018 | ATTOM DATA SOLUTIONS
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