2018 Economic Forecast: Broad Trends

Real Estate

INTEREST RATES ARE RISING
2018 starts with a global selloff of bonds as investors bet on global economic growth and China, the world's biggest holder of US government bonds, is considering significantly paring back their enormous appetite for American debt. Japan has also jumped on board with a similar position.

Lower bond prices mean higher interest rates for you! As bond prices go down, they offer higher interest rates - aka bond yields - to investors which are reflected in the interest rates banks offer to their clients.

EFFECT ON REAL ESTATE MARKET
The cost of borrowing will increase. In fact, according to the 2018 Economic Forecast by Dr. Ted C. Jones, the 30-year mortgage rate is expected to steadily increase to 4.7-5.3% by the end of the year. Which means if you are considering listing your home, it would be advantageous to list now in order to capture a wider pool of buyers. If you are considering buying, it would be a good time to meet with your lender to discuss your options.

STRONG JOB GROWTH
Jobs are everything and this year all the numbers are forecasting a strong job market with unemployment falling another 0.5-1%. Hurricane Harvey resulted in a temporary blip but the labor market has since recovered and propelled forward. Energy prices are steadily increasing and the energy sector is in hiring mode once again. This bodes well for the local economy as is strengthens the real estate market and brings high paying jobs to the market.

Screen Shot 2018-01-12 at 11.06.53 AM

Source: Dr. Ted C. Jones - Chief Economist at Stewart Title

GROWTH RATES BY STATE
Screen Shot 2018-01-12 at 11.06.40 AM
Source: Dr. Ted C. Jones - Chief Economist at Stewart Title

 

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BABAK BOBBY YAZDANI
REALTOR®, RENE, CHMS, PSA, CCIM Affiliate
Coldwell Banker United | Residential & Commercial

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