Whats the State of the Real Estate Market ? Here are some answers …

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

1. Home price appreciation RATE has started to slow – meaning they are increasing at a slower rate than in the last year
2. 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
3. Biggest problem for the housing market is shortage of inventory
4. Economic backdrop is positive
5. Recession is not expected until 2020
6. Mortgage rates will continue to raise, expected at 4.8% by the end of the year, and 5.1% by end of 2019
7. Credit availability still very tight, though increase in housing costs should open up more lending options
8. Millennials are driving housing demand – the largest cohort of millennials has not even started buying homes
9. Affordability remains a huge issue for those who are not homeowners yet
10. Lack of wealth transfer among some minorities will hold their homeownership rates down
11. Impact of Tax reform may be masked by strong economy and job growth – possibly see more impacts when the tax season comes
12. 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.