The start of a new year is always a great time to begin developing investment resolutions and planning out those long-term financial moves, such as selling your home or buying a new home or investment property. These first several weeks of the new year have been enlightening and the following is a quick look at what the industry experts have to say about the trends promising to shape the 2018 real estate market:
4 Real Estate Trends to Follow
- Rates are rising, but buyers have time. The current 30-year fixed mortgage rate hovers at 4.0%, but experts believe that number will rise somewhere between .25% and .50% during the course of the upcoming year in tandem with the improving U.S. economy. So if you are a buyer, investing earlier in the year will be more in your long-term favor.
- Banks are likely to get more aggressive about mortgage loans. The economic upswing also has banks and mortgage lenders on the prowl for new buyers. This is great news for new homeowners or those looking to purchase investment properties and instead of pursuing banks, they may just find it’s the banks knocking on their door.
- High-tax states are likely to see more homes hit the market. One of the bigger targets of the recently passed tax reform bill is homeowners in high-tax states, such as those states along the coastlines. These homeowners will now face a state and local mortgage deduction of $10,000 which is likely to influence owners of second or third homes into selling. While maybe not the best of news for those being persuaded into the marketplace, this is great news for buyers as the increase of for-sale properties paired with the slowly increasing mortgage rates will equate to more affordably-priced homes.
- An increase of vacation and second home buyers. While the latest tax reform bill may influence those in higher tax states to downsize their properties, that same bill will likely trigger a number of new vacation home and second home purchases in other states. This is particularly true for those more affluent Americans for whom the reform bill will lead to more cash in hand and an economic optimism that will spur real estate investment.