With the economy shifting into higher gear and more Americans itching to land a new home before interest rates get too high, the U.S. residential real estate market looks like a hum-dinger as 2018 kicks off.
What’s in store for buyers, sellers and industry professionals? According to multiple industry experts, these trends could shape the real estate market in 2018:
The average 30-year fixed mortgage rate stands at 4.0%, according to data from Wells Fargo. Expect that figure to rise as the U.S. economy improves and the Federal Reserve tries to keep inflation in check. “Mortgage rates will rise by 0.25%, and possibly by 0.50% in 2018, if things get crazy,” says Richard Haynes, a real estate broker at Manhattan Pacific Realty, in Los Angeles. “If rates go higher than that, the Fed will step in and reinvest more principle and buy up mortgages to lower rates and get them under control.”
Banks will get aggressive about mortgage loans.
Homeowners, especially those who buy homes as an investment, should see more loan opportunities in the new year, as banks actively pursue buyers. “The banks, which have been tight for years, finally opened up lending and are offering so many more diverse loan products,” says Anthony Grosso, a real estate broker in Malverne, N.Y. “We purchased a commercial building in 2016 that no one wanted to finance and recently the local banks knock on my door asking me to refinance with them. This increase is lending has opened the market to so many more buyers — and that’s a trend that will strengthen in 2018.”
More homes selling in high-tax states.
The recently enacted tax reform bill took dead aim at homeowners in high tax states like California and New York by limiting state and local mortgage deductions to $10,000. “Now, with the new tax law, I’m predicting a large number of…
By Brian O’Connell | The Street