Last week we looked at 3 housing predictions for this year, here are three more! 4. The rent versus buy equation could tilt toward renting in costly markets. Thanks to the new tax law, it just got more expensive to own a home in high tax and high price places. For some people the changes, combined with rising prices, may mean renting makes more financial sense than buying. “Since home prices are rising faster than wages, salaries, and inflation, some areas could see potential home buyers compelled to look at renting” particularly in expensive West Coast cities, noted Blitzer. “We begin 2018 with a frigid cloud of uncertainty surrounding the impact of the new tax bill that restricts State and Local tax deductions, both very high in states such as New York, New Jersey, Connecticut, California and Illinois,” noted Leonard Steinberg, president of brokerage Compass, in an e-mail with his quarterly report on the New York’s luxury market. “Will uncertainty lead the consumer to become a society of renters with diminished incentives to buy?” He thinks not. Nevertheless, high rents and student debt loads have also made it difficult for young households to save up a down payment even if they can afford the monthly mortgage. Moreover, with prices rising so fast even a small increase in mortgage rates can put people over the edge on affordability. 5. Mortgage rates will hover around 4%. In December the Federal Reserve bumped short term interest rates 25 basis points to between 1.25% and 1.50%. Historically, movement from the Fed has had a corresponding effect on mortgage rates, but three hikes in 2017 and two in 2016 only moved the cost of a home loan slightly higher, casting doubt on just how much of a difference the three hikes Fed policy makers have projected for 2018 will have on housing. Experts tend to agree mortgage rates will finish the year between 4% and 4.5%. That’s a touch higher than the rates for most of 2017 but still historically low. What they disagree on is how we’ll get there. Ralph McLaughlin, chief economist at Trulia, for example, expects a slow and steady rise. Greg McBride, chief financial analyst at Bankrate.com, anticipates volatility with rates “dipping below 4% at least once, spiking above 4.5% and closing the year around 4.5%.” 6. Millennial demand for housing will keep climbing. After a decade of decline the homeownership rate finally ticked up in 2017. By the third quarter, 63.9% of households were occupied by owners--up from a low of 62.9% in the second quarter of 2016. McLaughlin says 2017 will be remembered as “the year the bleeding stopped and the healing started.” As Millennials age this trend is expected to continue. The generation of adults born after 1980 were slow to enter the housing market, but as a growing share of them get married and have kids they are buying homes at rates equal to their parents. In fact, single millennials are more likely to own a home than prior generations of singles. Keeping you protected,   Rick   All Access Insurance in Littleton, CO,  who represents multiple insurance companies as a “Broker” and provides products for auto, home,  commercial, workers compensation, and much more!   Call us today for a free quote at (303) 932-1700