Prospective homebuyers should expect to shell out more as home prices are going beyond the boundaries of income and as interest rates are increasing.
“Tight housing inventory has been an important feature of the housing market at least since 2016. For-sale housing inventory, especially of starter homes, is currently at its lowest level in over ten years,” said Freddie Mac Chief Economist Sean Becketti. “If inventory continues to remain tight, home sales will likely decline from their 2016 levels. As we enter the spring home buying season, all eyes are on housing inventory and whether or not it will meet the high demand.”
Many homeowners currently feel uneasy in selling their homes due to fear that they won’t be able to find another home they like that’s in their budget, according to Freddie Mac. “fear of not being able to find another home they like and that falls within their budget” and not wanting to let go of their current low mortgage rates are the reasons Freddie Mac cited for low for-sale housing inventory.
Total home sales are forecasted to be at 5.90 million this year and 6.02 million in 2018; house prices are expected to grow by 5.2% this year and 4.1% next year; and total originations are projected at $1.545 billion this year and $1.5 billion next year.