2018 Real Estate Market Predictions

                                                   2018 Real Estate Market Predictions

The real estate market overall is expected to grow in 2018, according to most experts in the field. This is great news for investors, but first-time homebuyers may be looking at a slightly more difficult year. Here are some predictions for the real estate market in the coming year.

Inventory Shortages Continue to Drive the Market

Inventory shortages continue to be the main factor in home prices again in 2018. Housing starts are still low, and Svenja Gudell, Zillow chief economist, says that nationwide there are 12% fewer homes to choose from now than a year ago. Most of these properties for sale are in the highest home value bracket and well out of the price range of most first-time home buyers. This means those looking to buy a home for the first time will continue to struggle to find affordable housing for most of the year.

Demand Remains Flat

One factor keeping home builders from committing to a lot of new home starts is the mostly flat demand. One of the biggest factors in home demand is population growth. In the United States, population growth has remained low over the last few years with a growth of only 0.7% last year – the lowest since 1937. So long as demand remains on the low side, builders will likely not surge to build a large number of new homes.

However, Metro Nashville is an area still experiencing high growth from new people moving into town. As a result, our local area will continue to have new home developments, though these may also slow some from past years.

Builders Focus on Entry-Level Homes

While for several years now home builders have focused on the higher value homes, the tide may finally turn this year. The demand in the market for homes is largely in the entry-level segment at this time, and builders may move to capitalize on the market. So far, the number of new homes built for the past several years has remained well below historical norms, but the entry-level demand may finally shift this trend in favor of first-time homebuyers. Unfortunately, the low-cost trend may mean a greater shift toward more affordable suburban areas. Land and construction costs are prohibitive in cities for entry-level homes. Expect to see a move toward the suburbs in the coming year.

Remodeling Fever Continues to Burn

One factor in keeping inventory for homes low has been the recent surge in remodeling current homes by homeowners rather than buying a new home. Expect to see this continue in 2018, especially with the popularity of home remodeling shows on television giving homeowners more ideas for remaking their own homes rather than selling them to look for others. Overall, this keeps home inventories down and continues the drive toward higher home values across the market.

The real estate market for 2018 continues to promise to be a great market for sellers, but those just starting to look for their first home will likely continue to struggle.

Tips to Get the Most out of Your Mortgage

                                           Tips to Get the Most out of Your Mortgage

Buying a home is both exciting and overwhelming for most people. Between unfamiliar paperwork and the unfamiliarity of a process that most homebuyers will only go through a few times in their lives, it can’t hurt to get some tips on how to excel at getting the best mortgage that meets your unique needs.

Realistically Assess Your Budget

Before you start looking at homes, sit down and realistically assess what you can afford. You may expect your income to rise over the coming years, giving you the confidence to stretch to afford that nicer home, but life has a way of bringing about the unexpected. Start the process early to get an idea of what interest rate you will qualify for and a monthly payment you can afford. If your income does increase in the coming years, use it to redo that kitchen or bath to get the most out of the house while you live there and increase its resell value when you move up to the bigger home.

Optimize Your Credit Starting Now

Getting professional help to smooth out the dings and knocks on your credit score can mean the difference in getting an interest rate you are happy with and settling for one that is less satisfying. If your credit is right on the margin of making a lender smile, start right now to begin to address what you can to get a better loan when you buy. Don’t get sucked into the false thinking that if your credit isn’t perfect, you won’t qualify for a mortgage, however. Many programs can help you qualify, even if your credit isn’t all that great. But even with those programs, the more you do to improve your situation, the better your payments will be.

Analyze Your Down Payment Options

Many people still buy into the idea that you must have 20% down to qualify for a mortgage. Nothing could be further from the truth! Many mortgage programs can qualify you for a mortgage with 3.5%–5% down. However, the more cash you have available at the time of purchase, the better off you are likely to be. If you do have 20% down, you can likely skip the private mortgage insurance payments right from the start. And you can use cash to buy down your interest rate, a move that may save you money for years to come.

The more you understand about the mortgage process, the better able you will be to get a mortgage that will make your home feel cozy for years to come.