With more and more Americans eager to buy a new home before interest rates get too high, the U.S. residential real estate market is forecasted to be hotter than ever – and for a growing number of reasons.


According to industry experts, these five trends may help shape the real estate market in 2018.


Rates are slowly rising.

The average 30-year fixed mortgage rate stands at 4.2 percent according to Wells Fargo. But experts warn that buyers should expect to see that figure rise as the U.S. economy improves. Mortgage rates may rise by 0.25 percent – potentially going as high as 0.50 percent – but any higher than that, and the Federal Reserve will likely intervene and reinvest more principle and buy up mortgages to lower rates and thwart inflation.


Banks will diversify mortgage options.

Homeowners, especially those who buy investment homes, may find more loan opportunities as banks actively – and aggressively – pursue buyers. Because while banks have been tight for years since the bubble burst, they have slowly started to open up lending and will be offering so many more diverse loan products – and that increase in lending should open the market to so many more buyers.


More home sales in high-tax states.

The recent tax reform bill took aim at homeowners in high-tax states like California and New York by limiting state and local mortgage deductions to $10,000. Experts predict that markets may see an increase in inventory as second homes in high-tax and high-cost states hit the market. This increase in inventory, compounded by increased mortgage rates, may cause prices to level out, making homes more affordable.


More vacation-home buyers.

The recent tax reform bill will also put more money in affluent Americans’ hands, potentially spurring an increase in vacation-home purchases. And for those who can afford second homes, interest rates and interest deductions will pose less of an issue as many of these purchases are typically cash transactions, further fueling this sector of the real estate market.


Agentless transactions.

For both buyers and sellers, more tech-oriented real estate options will emerge, potentially helping them save thousands of dollars on agent fees, which average 5 percent to 6 percent of the total home sale price per transaction. In fact, big startups like OpenDoor.com are already helping sellers list and sell for themselves. And other companies are now helping buyers bypass agents, too.


And while no one can predict with any certainty what 2018 holds for the housing market, one thing seems sure: Buyers, sellers, agents and lenders can expect a great deal of activity, opportunity and – hopefully – more growth in the year to come.


But regardless of what the future holds, whether you’re buying or selling a home, our experienced agents are here to help you every step of the way.


Because at DeLeon Sheffield Company, ‘We’re More Than Realty; We’re Family.’


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