There are 10 important mortgage and housing trends that you need to watch for during the rest of 2018.

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Here are the top 10 mortgage and housing trends to watch out for during the rest of 2018:

1. Decelerating home prices. Over the last couple years, we’ve seen a massive spike in home prices and home appreciation. In 2016, prices rose 6.3%. In 2017, they rose about 6%. This year, however, they’re only set to rise about 4%. Why the slowdown? One factor is the steady rise of new home construction. The number of new construction homes being built is expected to increase 8% this year, which is a couple percentage points higher than the previous three years.

2. More homes for sale. In some of my previous videos, I spoke about declining inventory. Now, however, you’ll see that trend shift during the middle and latter part of 2018. There are a few different reasons why. First, new construction is catching up with the market. Also, as baby boomers get older, you’ll see more of their homes come onto the market. A portion of the houses that people bought during the dot-com boom of the late 90s and during the recession a decade later should come onto the market too.

 

“If you’re looking to buy or sell, now’s the time to do it. “

 

3. Rising mortgage rates. The Federal Reserve is showing no signs of slowing down on this. During November and December of 2017, rates were around 4% to 4.1%. By December 2018, they’re expected to be between 4.7% and 5%. If rates were at 4% and you bought a $300,000 home with a conventional loan requiring a 20% down payment, your monthly mortgage payment would be roughly $1,430. If rates rose to 4.5%, your monthly payment would increase to $1,520. At 4.75%, you’d be paying $50 more per month. At 5%, you’d pay over $1,600 per month for that same $300,000 house. If you’re a homebuyer, remember that rates will only keep going up.

4. Declining affordability. As affordability declines for buyers, that will influence how sellers price their homes. If you’re looking to sell, now is the time to do it. Inventory is low and buyers’ collective buying power is as high as it’s going to get. As interest rates rise, buyers’ buying power declines. Not to mention the fact that we’re in the middle of the spring market and homes are flying off the shelves.

5. Wire fraud and security problems. Buyers might have challenges wiring money to title companies, escrow companies, attorneys, etc. In 2016, wire fraud increased 480%, and the problem only got worse in 2017. If you’re a buyer, the best way to avoid becoming a victim of wire fraud is to call those who are involved in your transaction (your agent, lender, title company, etc.) once you have emailed your instructions for wiring your funds to purchase the house and have them verify the information you’ve been sent.

To read about the five other mortgage and housing trends you need to be aware of for the rest of 2018, follow this link.

As always, if you have any questions about today’s topic or you’re thinking of buying or selling a home soon in our Baltimore metro area, don’t hesitate to reach out to me. I’d love to help you.

 

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