Welcome to our forecast of economic weather in a brand new year. We already know 2018 won’t be dull. We are predicting that our economic lives are going to be fair to sunny with a chance of rose-colored skies.
Ready? Find your Dream house.
Set? Build your savings and credit.
Go. Live your best life.
This week Palm State Mortgage takes a look at our amazing housing and economic weather forecast, as we set sail into 2018.
Forecast Report Point #1: Rising New Home Sales
Experts predict great flurries ahead, not of snow—although that might be true. But remember, this is an economic weather report in this fiscal forecast.
Thus, here at Palm State Mortgage Company, we feel comfortable as we predict flurries of building. And we expect happy storms of new construction for the coming months. We believe new construction will eclipse the housing inventory shortage. This belief is supported by experts such as Senior Economist Joseph Kirchner. He said,
1. “December’s increase in construction labor is a hopeful reminder that things will eventually get better for our severely depleted housing market…”
2. And he added to our forecast. “In fact, if this trend gains momentum, it could address one of the largest issues holding back inventory – a lack of construction labor.”
3. Kirchner summarized the economic weather behind this point. He concluded, “Let’s hope it does because the report also shows no end in sight for the insatiable demand we’re seeing in the market,” Kirchner added. “Jobs drive housing demand and with the unemployment rate remaining at its lowest level of the millennium, it’s only going to pick up.”
Trend Towards Optimism
Clearly, we could not have said it better ourselves. And, we ask you, our Palm State Blog Readers. Isn’t this a trend toward optimism and positivity even among those who usually predict gloomy financial clouds every January?
We add a brand new Jan.5th statistic. “…According to a new survey from the Associated General Contractors of America, Industry optimism for all types of construction, measured by the ratio of those who expected the market to expand versus those who expected it to contract, hit a record high.”
This is not to say your new home won’t come at an increased cost. However, we think the slow, steady build-up of home sales and the rising job market will hold those increases at a manageable level.
Forecast Report Point #2: Your Budget and Home price appreciation
With home prices rising a mere 3.2% next year, we know sales are going to increase. Likewise, if you own a home, you’ll be happy to see this appreciation. Therefore, a lively, reinvigorated market becomes part of our forecast of 2018 predictions. This slower rate of increase will allow for home sales to pick up next year.
Forecast Point #3: About Those Mortgage rates –
So there is no doubt, mortgage rates will rise a bit. However, buyers of 2018 will still find them neatly captured in a budget enhanced with better jobs. And there will be more income from tax breaks.
“Potential home buyers should expect to encounter a higher interest rate environment as the year progresses,” says Johnson.
Tierce buys into that philosophy.
“Expectations are that rates will be in the high four percent to mid five percent range by the end of 2018,” says Tierce.
Rates may jump; we ask, “How high?
Dr. Clifford Rossi, professor of finance at the University of Maryland, also agrees. He believes that rates are headed north, only not quite as high. He believes rates will range between 4 and 4.25 percent in six months and 4.2 and 4.4 percent by this time next year.
“Economic growth is starting to pick up. Meanwhile, unemployment rates remain quite low,” says Rossi. As a result, “I expect mortgage rates to edge up only moderately in the coming year.”
The Storm in the Forecast: We can give you a virtual storm of statistics. Experts expect mortgage interest rates to average 4.6% throughout the year. They forecast such rates will rise to 5% for the 30-year fixed-rate mortgage as 2018 ends.
Our Forecast Puts You In the Eye of the Storm: The truth here at the eye, Your mortgage payment, assessed month-by-month, depends on a great many factors inherent in your own fiscal health.
That’s the reason mortgage brokers like Palm State Mortgage Company help people like you, our readers. We want you to view all the best lenders through our years of experience and education. Our views are customized for your individual financial situation. We give you options that fit your life, regardless of what the generalized, national, averaged facts and figures state.
Our Palm State Economic Weather Forecast
Thus, our economic weather forecast is fair and sunny for 2018. But, this blog only covers three of our fair weather forecast points for the New Year. In next week’s Part II, we will add four more financial and fiscal predictions for a total of seven. Palm State Mortgage Company will forecast points which will affect your family’s life in 2018.