2018 is a great year to buy a house but you better not wait too much longer. Predictions for the 2018 forecast offer moderate gains and home prices and rising inventory levels, which is good for a balanced market, while low unemployment and consumer confidence mean that buyers are not only buying but feeling good about that purchase.
Of course, it all depends on where you live. Some markets are doing better than others but in general, it's a good year to buy, but I wouldn't wait too much longer and here's why.
#1. Rates are rising.
After our years of record low-interest rates, the government is finally making some noticeable increases. We are now out of the 3% mark and the rate for a 30 year fixed mortgage broke the 4% mark last year. With economic growth continuing to rise, we might even hit 5% by the end of the year. However, this isn't a huge jump, and it still makes homeownership very affordable. This is not the 12% we saw in the 1980s.
#2. Prices are increasing.
Not only are interest rates going up but so are home prices. However, they're not rising at dramatic rates, at least not in most markets across the country. Because we still have a balanced market, prices are not rising so high that it has all real estate agents crying "bubble". With jobs increasing, wages increasing, rates being low and inventory increasing, it all adds to a balanced market, however, if you're looking to get a lower price, jump on the homeownership wagon now as prices will only continue to rise.
#3. Inventory levels will increase.
This is the benefit we've been waiting for. In too many markets across the country, inventory has been low with a less than 2 to 3-month absorption rate. A six-month absorption rate is perfect for a balanced market, meaning that if no new listings hit the market today it would take six months to completely exhaust all the listings. The majority of inventory growth will happen in the middle to upper tier price point usually over the $350,000 mark and above $750,000. New home construction is expanding at a very balanced rate but not too fast, thanks to a constricted labor market, limitations, and bank financing for building loans. It's been a slow climb back from the recession, but this keeps us in a balanced market. Too fast and the bubble bursts, too slow, and the market gets stagnant.
If you're looking to buy sooner rather than later, I would urge you to check out rates, inventory and prices throughout the market that you are interested in. You might be surprised as to what you can afford. Start here by looking at all the homes for sale in Columbus Ohio.