5 Things to Know about 2018 Housing Market

Omri Barzilay, a contributor to Forbes, addresses the 2018 housing market.

Are you thinking about buying a home in 2018? You’re not alone. Across the country, lots of people are trying to decide whether to make that leap into homeownership next year. So, since 2017 is coming to a close, we decided to write up our thoughts on where the housing market stands today and what you should look for in 2018, in collaboration with Unison Home Ownership Investors. Our analysis is based on the 2017 Unison Investment Management report. Keep reading for an overview of the top five things you need to know about the housing market in 2018.

1. U.S. Home Price Trends

It’s been a good decade for home prices. After the housing market crash that started in 2008, we’ve seen a steady climb, with some markets rising faster than others. Over the last two years, home prices have been rising about 5% to 6% per year on average, according to the Case-Shiller Index. While no one can predict the future, we think it’s quite likely that home prices will continue to rise gradually in 2018. You should keep in mind, though, that gains of recent years have been higher than usual. If we look back over a longer period of time, home prices have typically appreciated at a rate of about 3% per year, so the gains seen in recent years are definitely above the historical norm.

Is the housing market in a bubble? That is always difficult to say for sure, but when looking at the Case-Shiller index we don’t see evidence of a bubble. In fact, the growth rate since 2011 has been fairly stable on a national level. The graph below compares where the Case-Shiller Index would be if it had seen steady growth of 4%, 5%, 6%, or 7% per year since 1975. The graph doesn’t show a bubble like the one seen ten years ago. Rather, it shows a steady climb.

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