HOUSINGNEWS REPORT
8 ECONOMISTS PREDICT 2018 HOUSING MARKET TRENDS
2. WHAT IS YOUR OUTLOOK FOR EXISTING HOME SALES AND PRICES IN 2018?
YUN : More uncertainty than in the past because of tax reform and the ongoing issue of inventory shortage and housing unaffordability. Still, there is pent-up household formation that will be released and builders are marginally building more. So existing-home sales will likely not see much change (0 percent), while home prices at the national level rise by only 3 percent. VIVAS : We’re projecting home prices to increase 3.2 percent year-over- year, which is a slow-down compared to the 5 percent to 7 percent price growth we’ve seen in the last three
years. As price gains begin to taper off, we also expect a slight pick-up in home sales of 2.5 percent year-over- year — 5.60 million homes — due partially to inventory increases. That marks an improvement over 2017, where sales were up 0.4 percent at 5.47 million homes. VILLACORTA : Both are on pace to rise, but each trend is fighting separate headwinds, so we should see some moderation in 2018.
homeowners are finally emerging from negative equity positions to face a housing market they can’t afford if they sell. So unless current homeowners seek to downsize or relocate, there will be challenges to unlocking existing inventory. Also, increasing existing- home sales over the past eight years is nearing long-term historical rates, suggesting that some moderating pressure is likely in 2018. Constrained supply will also add upward pressure to home prices — in certain market segments. We are already seeing higher-end markets (those above $1 million) softening in terms of growth, while others are seeing explicit market declines. Uncertainty, permeating the housing market for the last decade, will continue, and consumers will think hard before jumping into the market. MUOIO : Existing home sales and prices should both rise in 2018. Elevated homeownership tenure should limit available inventory and sales growth, though underlying demand should remain strong. There is also the possibility that rising prices provide homeowners greater equity and encourage more listings, a development that has yet to occur but becomes more likely with time. There will also be some regional disparity as tax reform plays out, with more expensive coastal markets affected by the revised SALT and mortgage interest deductions. With some of these markets already
On the home sales side, lack of inventory will limit sales. Many current
ECONOMIST
2018 EXISTING HOME SALES 2018 EXISTING HOME PRICES
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JANUARY 2018 | ATTOM DATA SOLUTIONS
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