Every year around this time, the house flipping industry makes its predictions about what will happen in the year to come. Last year, everyone thought that mortgage rates would go up, new construction would ease the lack of inventory, and prices would tick up slightly. We now know that mortgage rates stayed just about where they were, the housing inventory got even lower, and prices went up more than expected as a result.
This year, the big question is how the new tax bill will affect the market. Early indications suggest that buyers will be wary for the first few months of the year as they figure out how the new tax laws will affect them and just how much money they’ll have to put toward a house.
But after that, the experts all expect that the housing market will continue on its upward trend with prices going up between 3% and 5% over the course of the year.
Who Will Be Buying in 2018?
There are two big groups that house flippers should pay attention to in 2018. The first is Millennials.
Millennials are already one of the biggest segments of the buying market, as they are now the largest generation in America. But the Millennial share of the market will get even bigger this year as more people in this age group start to get married and have kids. Millennials as a group have been much slower to settle down than their parents, but now that many Millennials are in their late 20s and 30s, they are starting to buy houses at the same rate that their parents did. At the same time, single Millennials are more likely to buy today than singles in their parent’s generation were.
The other big market segment to take note of this year will be the so-called boomerang buyers. These are the 1.5 million Americans who lost their homes to foreclosure during the Great Recession. Foreclosures stay on your credit report for seven years, and that window is finally coming to a close. As a result, many of these Americans who have been shut out of the housing market will be looking to buy again.
For the most part, these boomerang buyers will probably look for homes on the lower end of the market that they can purchase with a small down payment. If the mortgage rate stays around 4% this year, as it is expected to, and housing inventories start to rebound, that should be very possible.
To discuss these trends and other house flipping news in more depth, give our office a call. In addition to our highly sought-after house flipping loans, we are always happy to share our insights and insider information with our clients.