Here are talking points about the current state of the housing market. Please let me know if you have questions.
State of the Housing Market – August 2018
Home price appreciation RATE has started to slow – meaning they are increasing at a slower rate than in the last year
The home price drop seen in 2008 will not repeat since today’s conditions are very different – no subprime lending, speculation or overbuilding like we saw last time
Biggest problem for the housing market is shortage of inventory
Economic backdrop is positive
Recession is not expected until 2020
Mortgage rates will continue to raise, expected at 4.8% by the end of the year, and 5.1% by end of 2019
Credit availability still very tight, though increase in housing costs should open up more lending options
Millennials are driving housing demand – the largest cohort of millennials has not even started buying homes
Affordability remains a huge issue for those who are not homeowners yet
Lack of wealth transfer among some minorities will hold their homeownership rates down
Impact of Tax reform may be masked by strong economy and job growth – possibly see more impacts when the tax season comes
Most housing markets across country remain healthy, and John Burns Consulting still forecasts steady volume and pricing growth through 2019. However, overall risk levels have increased compared to earlier in the cycle, namely affordability.