What you should know about today’s housing market

Ten years post-housing bubble, the housing market has experienced some drastic changes. From competitive mortgage timelines to the popularity of the sharing economy and the impact that millennials are having on the housing market, there is much more expected as the market adapts to new developments and trends that will define what lies ahead in 2018 and beyond.

Yet in many ways, the housing market, in particular, will continue to face a few challenges, especially when it comes to home buyers. Here are some of the top significant changes to expect in today’s housing and mortgage market.

Mortgage rates will rise up

Mortgage rates are expected to rise, so it might be worth it for potential home buyers to shop around before the current rates take a turn. While the rates ended lower than most mortgage experts expected in the past year, an increase is expected by the end of 2018 and beyond. The good thing is, homeowners have the option to refinance if they haven’t done so already, to significantly lower the rates by up to half of one percent.

An increase in mortgage rates makes it harder for home buyers to affordably gain access to loans. Considering the additional costs related to home loans, specifically the principle, interest, taxes and insurance, it makes sense to look for a suitable home loan that offers the lowest interest rates you can afford, according to an ONQ Financial breakdown of PITI payment.

Home prices will decelerate

After a torrid couple years of home pricing accelerating, first time home buyers can take a breath of relief as home prices are expected to decelerate. According to the Federal Housing Finance Agency, home prices rose by around 6.3% in 2016 and went on to exceed 6% in 2017. But for 2018, the median forecast among top industry and lender groups is for a 4.1% increase in price for existing homes nationwide.

Why the slowdown? The construction of new homes, especially single-family-units, is expected to rise sharply this year and beyond, with roughly 912,500 new houses expected to enter the market by the end of the year. With more houses available, first-time buyers can expect more favorable home prices.

More homes available for sale

Although home buyers across the country are still struggling to find houses for sale, there’s some hope towards the end of 2018. A 2018 national housing forecast by Realtor predicts that housing supply will improve as more new houses become available for sale. Part of the reason why there is still a tight supply of the kinds of homes that first-time home buyers want is the fact that:

  • Most baby boomers are comfortable aging in their homes rather than downsizing.
  • Investors who bought many homes after the past housing bubble are making too much profit as landlords to even consider selling.
  • Most builders are making more money from expensive houses, far more than entry-level houses that first-time buyers are looking for.

Despite all these, we’re getting to a point where we’re seeing significant growth in the housing inventory by the end of 2018 and even in the coming year.

An increase in home resales

Resales of existing homes are expected to continue rising modestly. The same is expected for new homes that will rise to as high as 7% as more builders enter the market to cater for first-time buyers. Cities in the South will show the highest sales growth, particularly in Charlotte, North Carolina, Dallas, Oklahoma, Tulsa, Arkansas and Little Rock. This growth is driven by plenty of vacant land to build on, favorable regulations and strong, vibrant regional economies.


There are numerous developments expected in the market, even as homeowners look to gain more equity as home values rise. At the same time, banks are also expecting homeowners to borrow against their equity. Amid the push for more transparency, lenders are embracing automation to guide borrowers when selecting the best loan products. These and other changes are expected to impact the housing market in one way or another.