Inventory constraints that have fueled a sharp rise in home prices and made it difficult for buyers to gain a foothold in the market will begin to ease next year as part of broad and continued market improvements, according to the realtor.com 2018 National Housing Forecast released today by the online real estate information and services destination.
The easing of the inventory shortage, which is expected to result in more manageable increases in home prices and a modest acceleration of home sales, is based on an inventory growth trend that began in August 2017, according to realtor.com. The annual forecast, which is among the industry’s bellwethers in tracking and analyzing major trends in the housing market, also expects an increase in millennial mortgage share and strong sales growth in Southern markets. The wildcard in 2018 will be the impact of the tax reform legislation currently being debated in Congress.
“We are forecasting next year to set the stage for a significant inflection point in the housing shortage,” said Javier Vivas, director of economic research for realtor.com. “Inventory increases will be felt in higher priced segments after home buying season, which limits their impact on total sales for the year. As we head into 2019 and beyond, we expect to see these inventory increases take hold and provide relief for first-time home buyers and drive sales growth.”
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