As 2017 comes to a close, analysts are beginning to look back over the year to determine how housing will be affected in 2018.
This year brought a new political administration, and all the changes that came with that, an onslaught of natural disasters and a period of the lowest level of homes for sale on record.
All of this will change the climate for the housing market going into 2018, according to the latest research report from Trulia.
In order to determine what changes to expect in 2018, Trulia commissioned a survey, conducted online by Harris Poll of more than 2,000 Americans ages 18 and older, about their housing sentiments, hopes and fears in the year ahead.
The survey found that as we prepare to enter 2018, Americans are less optimistic about home buying. About 25% of respondents say 2018 will be a better year to buy a home than 2017, while another 25% say it will be worse. And only 10% answered that they plan to buy a home within the next 12 months.
Right after the presidential election last November through the beginning of this year, confidence surged among consumers. Now, however, that confidence has leveled off as Republican home buying sentiment fell one percentage point from last year to 16% and Democrat sentiment remained flat at -10%.
However, what they lack in enthusiasm about buying a home, Americans make up for in their belief that now is a good time to sell a home. About 31% of Americans say 2018 will be a better year to sell a home than this year was, versus just 14% who say it will be worse. This represents the second highest gap since Trulia began asking the question in 2014.
But while many Americans are saying now is a good time to sell, only 6% said they plan on selling their home in the next 12 months.
Due to the natural disasters that swept through the U.S. this year, many Americans, a full 39%, said they are more concerned about the potential threat of a natural disaster affecting their home. Concern is even higher in the South where the hurricanes hit. In these areas, 43% of Americans said they are now more concerned about natural disasters.
Therefore, based on the results of this survey and other research, Trulia made these predictions for housing in 2018:
The major tax overhaul will shift burdens for homeowners, cooling home prices especially amid high-cost coastal areas. However, Trulia also forecasted that the doubling of the standard deduction will boost housing demand in the Midwest and South.
The homeownership rate will continue to rebound as Gen Xers transition back into the homeownership market and Millennials enter for the first time.
The South and Midwest will see the most growth in 2018 in cities such as Grand Rapids, Michigan; Nashville, Tennessee and Raleigh, North Carolina.
