NAR forecasts existing home sales to rise to post-crisis high in 2018
Next year could see an increase in existing home sales due to an improving economy, job growth and rising confidence that now is a good time to buy a home, however it will be limited by continued supply shortages, according to the latest forecast from the National Association of Realtors.
NAR also predicted if the Republican tax bill passes, it could act as a disincentive to homeownership and hold back strong sales activity, according to its residential housing and economic forecast.
NAR explained the new tax bill could affect home sales and even home prices in 2018 and beyond, claiming that in its current form, the bill is a direct tax hike on homeowners. NAR’s analysis of the bill estimates it would cause home values to drop 10% and raise taxes on middle-income earners by an average $815.
NAR predicted 2017 will end with 5.47 million existing home sales, the fastest pace since 6.47 million in 2006. However, this is only 0.4% from 2016’s 5.45 million sales. NAR forecasts home sales will increase 3.7% to 5.67 million in 2018, still the highest point since 2006. The national median home price is expected to increase 5.5% in 2017 and 2018.
“Despite considerable demand all year, pending sales have lost a step in recent months because low supply is pushing prices higher and making home buying less affordable in several parts of the country,” NAR Chief Economist Lawrence Yun said.
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