Here are realtor.com’s six major predictions for the housing market in 2018:
1. Home price appreciation – Home prices are expected to rise 3.2% next year. This slower rate of increase will allow for home sales to pick up next year.
2. Mortgage rates – Mortgage rates are expected to average 4.6% throughout the year, but reach 5% for the 30-year fixed-rate mortgage by the end of the year. The Mortgage Bankers Association also predicted rates will continue rising, saying mortgage rates could pass 4% or even 5% over the next few years.
3. Existing Home Sales – Existing home sales are forecasted to rise 2.5% as the trend in low inventory begins to reverse course.
4. Housing Starts – Even as existing home sales increase, new home sales will increase even more, meaning housing starts will also rise. Overall, housing starts are predicted to rise 3% over the year, but single-family home starts will increase 7%.
5. New Home Sales – These will increase at the same rate as housing starts, rising 7% year-over-year in 2018.
6. Homeownership Rate – The homeownership rate will stabilize at 63.9% after having hit bottom in the second quarter of 2016, realtor.com forecasted.