The recent forecasts for the Phoenix housing market show that price appreciation may slow down in the coming months. Considering the tremendous volatility of the housing market over the last decade, this could be a good thing.
Currently, the real estate predictions for 2018 indicate that Phoenix could enjoy a fairly normal year when it comes to home values. Housing market forecasts for 2018 indicate that home prices within the United States could advance by 3 to 5 percent during the next 12 months. Historically, this would be considered a normal growth rate. Over the last 30 years, home prices have typically risen by 3 to 4 percent a year once you exclude the occasional housing bubble or bust.
In November of 2017, CoreLogic reported their results for their home price index. According to their estimates, home values in the country advanced by 7 percent in November of 2017 compared to where they were in November of the previous year.
Another noteworthy development is among home values within 28 states. Now, these states officially have home values that are higher than their pre-crisis levels. This essentially means that the prices in those states have never been higher than they are today. As home values across the nation continue to rise, more states will reach levels higher than their pre-crisis levels.
CoreLogic also announced their forecasts for 2018's housing market. Based on the current trends, their analysts believe that American home prices will advance by 4.2 percent from November 2017 to November 2018.
100+ Real Estate Economists Predict Rising Prices
Last summer, Zillow surveyed more than 100 real estate economists, experts and analysts. The group came up with a number of findings. Among the many results, they created a forecast for the 2017 and 2018 market.
On average, the economists predicted that home prices would increase by 4.8 percent in 2017. In 2018, they are expected to rise by 3.65 percent. From 2017 to 2021, the group believes that values will increase by a total of 17.9 percent.
Judging by these predictions, we can generally expect a year of fairly normal growth. This year's growth will be less than the above-average gains in prices that we have seen in the last few years, but still a fairly stable growth rate.
In recent years, home values in many cities have risen faster than wage and income growth. This is mostly due to an imbalance between supply and demand. Housing inventories have not managed to keep pace with the demand for housing. In the Phoenix area, buyers are competing for a limited inventory. This puts an upward pressure on home prices.
While the inventory shortfall could ease in coming months, the shortages will most likely continue to remain a factor in the 2018 housing market.
Mortgage Bankers Association Projects Gradual Increase in Mortgage Rates .
If the prospect of rising prices is not enough to develop a growing sense of urgency among buyers, an increase in mortgage rates will. The Mortgage Bankers Association looks at a range of economic indicators like mortgage rates in their financial reports. According to their forecast from October of 2017, the average rate for a 30-year, fixed home loans could increase to 4.6 percent in 2018 and 5 percent in 2019. In 2020, it could advance to 5.3 percent.
Altogether, these forecasts build a strong case for buying a home now rather than in the future. If these predictions are accurate or even close to accurate, buyers who wait until 2018 to buy their home will have higher housing costs.
Disclaimer: This article contains forecasts and predictions for the United States housing market in 2018. The projections were made by third parties who are not associated with our company. Service Star Realty makes no assertions or claims about the future housing market and economic conditions.