What 2018 Will Bring For the Mortgage Market?

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March 6, 2018 | By RGR Marketing Blog

Predicting the Unpredictable Future for Mortgages

Regardless of how you feel about the current administration and those holding power in the other top offices in the land, one thing is for sure: we live in relatively unpredictable times. It can be hard to know what to plan for in the year ahead, if you have no idea what will happen in the next week on a national scale, and how that might affect home prices, interest rates, consumer confidence, unemployment, or the economy as a whole.

The stock market may be at its most bullish point in recent memory, but many analysts and economists are beginning to wonder if we aren’t on the verge of another crash. Still, you can’t worry so much about what might happen that you fail to plan for what will most likely happen. So here’s a look at what you can probably expect in 2018 if you’re currently doing business in the mortgage industry.

The Numbers: What 2018 Looks Like for Mortgage Brokers

A quick Google search will give you a general appraisal of the minute ways that the numbers will most likely change in the year to come. Mortgage rates are expected to climb, approaching 5% by the end of the year—say most sources.

Home values are expected to continue to climb as well, by as much as 3%—depending on your market. And, home ownership rates are expected to stabilize as more new inventory (as much as 5-7%, depending on who you ask) comes on the market and more existing homes come up for sale (a little over 2% more, most experts agree).

A Possible End to the Shortage

With more new inventory hitting the market alongside more existing inventory, prices should stabilize a bit in some of the most inventory-crunched markets. This should ease up some of the pressure on first-time buyers and those who can’t afford to enter a bidding war in high-demand, low-volume markets.

This may not mean a literal “end” to the shortage that has made searching for a house challenging to the point of being undesirable for most millennials entering the market as first-time home buyers. It should, however, mean that home purchases as a whole will rise as inventory rises, now that the crunch is over.

Tax Changes Will Impact High-Dollar Mortgaged Purchases

The other big change that will impact home buying behavior this year was enacted at the end of 2017 in the form of tax reform by the federal government. Changes to tax laws that go into effect in 2018 will limit deductions available to home-buyers seeking large mortgages.

Under the old tax laws, taxpayers could itemize a deduction for mortgage interest on loans up to one-million dollars. Now they can only deduct mortgage interest on loans up to $750,000.

This may drastically reduce (by a quarter-million dollars) the amount of home that some prospective buyers will feel comfortable financing, knowing they will have to pay the interest on everything over $750,000 without being able to deduct it.

Things Should Remain Relatively Stable, Depending on Your Market

As always, predicting real estate trends for an entire nation, especially one as large and economically and geographically diverse as the United States, is problematic.

The trends—a small upswing in purchasing, and a slight cooling off in the higher end of the market, as more new and existing inventory comes on the market and new tax laws go into effect—are general.

Things may be somewhat to radically different in your particular market. And who knows what new policies and laws may roll out of Washington in the weeks to come. If you’re looking to stabilize the ups and downs of the market as they impact your home mortgage business, purchasing high quality mortgage leads can be a great bet.

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Predicting the Unpredictable Future for Mortgages

The Numbers: What 2018 Looks Like for Mortgage Brokers

A Possible End to the Shortage

Tax Changes Will Impact High-Dollar Mortgaged Purchases

Things Should Remain Relatively Stable, Depending on Your Market

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money today!

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Predicting the Unpredictable Future for Mortgages

The Numbers: What 2018 Looks Like for Mortgage Brokers

A Possible End to the Shortage

Tax Changes Will Impact High-Dollar Mortgaged Purchases

Things Should Remain Relatively Stable, Depending on Your Market

Start making more money today!

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