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20 Paul Bishop, Ph.D. is the VP of Research for the National Association of Realtors. In this role, he leads the Research Division's survey and market research activities, including analysis of real estate business and policy issues. Bishop's team of real estate research professionals collects and disseminates comprehensive data and conducts economic analysis in order to inform and engage members, consumers, and policymakers. Bishop holds a Ph.D. in Economics from the University of Illinois. With 2018 set in motion, are there any new housing trends you are seeing? When we when look ahead to 2018, the biggest area of uncertainty is how the market is going to react to the recently passed tax reform legislation. It could produce changesin the market in the coming couple years as it works its way through the system. One of the biggest challenges is going to be in certain high-cost parts of the country where they have high home prices, relatively high property taxes or high state income taxes, then that's ultimately going to make the cost of owning a home more expensive. In addition, renters may lose incentive to buy a home in high-cost areas if they can't use the mortgage interest deduction or the ability to deduct some of those other housing-related costs from their taxes. It's focused mostly on the higher cost areas. It's certainly something that everyone will be monitoring and how the housing market reacts in 2018 and 2019. What do these shifts predict for the future of the housing market? We're anticipating that the overall housing market is going to be relatively flat in terms of the number of sales. e opportunity for buyers to get out there and buy homes is limited by the fact that it takes much longer to buy a home simply because buyers have to spend more time looking for homes, so the market itself is limiting how many more home sales there can be—just because there isn't the inventory available. Taking into account some of the potential impacts of tax reform, we're still in an environment where prices are going to be on the general upward trend, and that's probably going to limit affordability, especially for firsttime buyers, and what that means in terms of saving for a down payment. I think that's going to continue to be a more significant concern as we look ahead to the next year to 18 months. According to the National Association of Realtors' most recent HOME Survey, a smaller share of households believe that now is a good time to buy or sell a home. What are the top factors behind this finding? When do you forecast buyer/ seller optimism to rebound? One factor behind that is the fact that affordability is being squeezed, so it's more difficult for a lot of first time buyers to think about buying a home and they're holding back to see what happens. ere was uncertainty about what the tax reform would ultimately turn out to be at the time the survey was taken—those are a couple of the biggest pieces that are raising some indecision in the housing market. In correlation to the inventory issue, it's more difficult to find the right home, or for the seller to be certain they can find their next home, because there's too few homes in the market, and that's just going to make the incentive to buy a home and the sentiment, or the optimism, in the market a little less than it might be otherwise. One of the positives that's out there that will drive the market, especially the more we get into 2018, is that it seems the economy is moving forward at a pretty solid pace. e unemployment rate is low, there's indication that incomes are on the rise, and wages are increasing. at's all good, because that's the foundation for a strong housing market. erefore, that sentiment might improve ASK THE ECONOMIST HEAR DIRECTLY FROM TODAY'S LEADING MARKET EXPERTS. "One of the positives that's out there that will drive the market, especially the more we get into 2018, is that it seems the economy is moving forward at a pretty solid pace. The unemployment rate is low, there's indication that incomes are on the rise, and wages are increasing. That's all good, because that's the foundation for a strong housing market." Paul Bishop VP of Research, National Association of Realtors