| President Donald Trump’s State of the Union address is scheduled for tomorrow, but realtor.com tried to steal a little of the president’s thunder by releasing its own “State of the Housing Union.”
In it they report the housing market outlook is looking bright on several fronts, including strong buyer demand (particularly among first-timers) and a growing U.S. economy urging more consumers to buy. But a housing shortage is also proving to be a major obstacle to achieving homeownership, according to the report.
“The macro factors that have defined real estate in recent years — strong demand and weak supply — continue to set the tone for the industry,” Joe Kirchner, senior economist for realtor.com, said in a statement. “The new tax law that caps the mortgage interest deduction and the deductibility of state and local taxes can be expected to impact the upper-end market in 2018 — precisely how and the extent of which remain to be seen.”
Highlights from realtor.com’s “State of the Housing Union:”
Confidence in the economy: Consumer confidence is rising and unemployment has dropped to its lowest level since 2000 (at 4.1 percent currently). The stock market has soared to record highs over the last few months.
Rising sales and prices: Home prices continued to rise, growing 5.8 percent on average during 2017 compared to a 5.1 percent growth in 2016.
Concerns about inventory: Inventories dropped 8.8 percent nationwide in the 12 months ending Dec. 31.
“Builders will need to focus more on homes geared for moderate incomes, partner with the government on initiatives to transform distressed urban neighborhoods and overcome labor shortages through a combination of workforce development training and pressure to ease artificial restrictions on the supply of labor,” Kirchner said in a statement.
