What to Expect When Buying or Selling a Home in 2018

It has been a seller's market for a while now, and industry experts expect that to continue into 2018. While it may be challenging for many home buyers, this is good news for potential sellers, since home prices are expected to continue to creep upward because of demand and lack of inventory. However, buyers can still make adjustments that will make purchasing a house a bit easier on them and their bank accounts. As with most investments, timing will be everything.

2018 Real Estate Forecast

It is expected that the 63.9 % homeownership rate, reported by the U.S. Census Bureau as of the third quarter of 2017, is going to inch upwards. What else is expected to rise? Interest rates are expected to slowly increase, and home prices will continue to rise. But it is predicted the increases in prices will not be as much as the increases seen in the last two years. Home prices rose slightly above 6% in 2016 and 2017, according to the Federal Housing Finance Agency, but 2018 predictions anticipate only a 4.1% increase in existing home prices nationwide.

Here are a few things to consider if you’re buying or selling this year:

• Look to buy a home in an up-and-coming neighborhood or suburb instead the popular, high-demand city. With home values increasing, it may be a wiser investment to buy a house in a neighborhood that is on the rise but isn’t in demand just yet. You will pay less for the property, and your home’s value is likely to increase over the next few years.
  
  
• Look to new construction. Since the recession, new construction of residential properties has not kept pace. It has made a comeback over the past year, but there is catching up to be done. New construction is a great avenue for finding the exact home and floorplan you desire.
  
  
• Growth in inventory (homes for sale) is predicted to be seen by fall and winter of 2018. This will create a more balanced market for buyers and sellers. As a potential seller, you may want to list before this occurs so you avoid stiff competition for buyer attention.
  
  
• As inventory grows, buyers will feel less pressure if they are not finding that home of their dreams this winter. The best advice is to keep looking because interest rates and home prices are lower now than they may be later this year. Don’t get discouraged though, because inventory levels are expected to increase as the year progresses.
  
  
• With rising home values, homeowners will gain equity. This means more profit for you when you sell. Lenders expect that about 1.6 million homeowners will get new home equity lines of credit in 2018, a 16% increase over 2017, according to a recent TransUnion study.

Now is the perfect time to speak with your real estate agent and get pre-approved for a mortgage with your lender. It will prepare you to be ready for whatever 2018 holds in store for you – buying, selling or both!