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RISING PRICES
AND RISING
EXPECTATIONS
Expectations are rising for homeprice
appreciation, according to the 2017 Q 4 Zillow
Home Price Expectations Survey. Home
prices have continued to rise, and showed no
signs of slowing.
Zillow sponsors a quarterly survey
conducted by Pulsenomics LLC which asks
more than 100 housing experts, market
strategists, and economists what to expect for
the U.S. housing market in 2018. e survey
has revealed a steady uptick in homeprice
increase, pushed along by the struggling
supply over 33 straight months.
Zillow reports that although overall new
construction picked up slightly toward the end
of 2017, single-family construction was still
plagued by a slow pace. Only 16.7 percent of
experts who responded to the survey believe
that this pace will change. is means the
limited inventory may continue into 2018.
"e American labor market is stronger
than it's been in decades and Americans,
particularly young Americans, are increasingly
feeling confident enough to buy homes," said
Zillow Senior Economist Aaron Terrazas.
"Homebuilding has not kept pace with this
surge in demand and remains well below
historical norms. We don't expect that these
demand-supply imbalances will fundamentally
shift in 2018: Demand will continue to grow
and, though supply should increase somewhat,
we still won't build enough new homes to meet
this demand, contributing to higher prices.
Higher mortgage rates will eat into buyers'
budgets, putting even more price pressure on
the most affordable homes for sale. Unless
there is a fundamental shift in the number and
type of homes for sale, this is the new normal
of the American housing market."
e 30-year fixed mortgage rate is
predicted jump from 3.92 percent to between
4.28 percent and 4.70 percent, with a median
prediction of 4.28 percent.
According to Pulsenomics Founder Terry
Loebs, most of the experts surveyed believe
the nationwide rate of increase will diminish
in the near future. "All but two of the 108
panelists who responded to this quarter's
survey expect weaker homevalue growth next
year relative to 2017, and panelwide, returns
are expected to average less than three percent
per year after 2018," said Loebs. "In a low-
inflation environment, nominal housing gains
in the three- to four-percent neighborhood
will still create homeowner wealth at a pace
exceeding the prebubble norm."
Experience: Prior real estate investing
experience preferred.
