No Real Estate Bubble
Homeowners should find their homes adding value through the rest of this decade; but that means more pressure on affordability for buyers. A new report from independent mortgage insurer Arch MI calls for prices to rise 2-6% in each of the next two years.
“With interest rates and home prices both on the rise, first-time homebuyers – largely Millennials – may want to consider making the jump from renting to owning sooner rather than later,” said Dr. Ralph G. DeFranco, Global Chief Economist, Mortgage Services, Arch Capital Services Inc.
Despite the affordability challenges and the impact of the tax changes, DeFranco is not forecasting a bubble. “Our research shows few signs of a housing bubble because the typical warning signs aren’t present. Overall, the shortage of housing paired with a robust job market should keep the housing market strong and growing, short of an unexpected event and despite the contrary pressures that may be created by the tax bill,” he concluded.
Source: Mortgage Professional America