Realtor.com® partnered with Builders Digital Experience (BDX) to deliver a special edition of its 2018 Housing Forecast today at The NAHB International Builders’ Show®.
The forecast predicts a growing economy and positive demographic trends, creating opportunities in the housing market despite the affordability challenges buyers will face from rising prices and mortgage rates.
Key takeaways for builders in 2018 include:
- Entry-level home construction a huge opportunity – Entry-level homes will continue to see price gains due to the larger number of buyers who can afford them and more limited homes available for sale in this price range.
- Millennials anticipated to gain market share in all home price segments – With the largest cohort of millennials expected to turn 30 in 2020, their homeownership market share is expected to increase. As they age into peak family forming years, their top housing priorities will shift from proximity to urban life to more space and quality schools.
- Southern markets predicted to lead in sales growth – Strong economies and healthy building levels will help drive Southern markets to beat the national average home sales growth. Builders who can adapt to regulatory hurdles in more challenging Western markets will find that prices still outperform national average growth in this region.
- The tax bill is a game changer – With the passing of the Tax Cuts and Jobs Act, the wealth and income effect of tax cuts will likely stimulate demand and increased production in the short term, but could lead to fewer sales and impact prices negatively over time in markets with higher prices and property taxes. Be wary of economic capacity constraints as inflation will kick in and the Fed will more aggressively increment interest rate increases.
A copy of the full realtor.com 2018 Housing Forecast, is available at the BDX booth, West Hall W5071, from Jan. 9 – 11.
