Economic Panel Predicts Housing Will Continue to Gain Ground in 2018
As the economy continues to strengthen, NAHB expects 30-year fixed-rate mortgages will average 4.31% in 2018 and 4.82% in 2019.
The newly enacted tax law will create a more favorable tax climate for the business community, which should spur job and economic growth and keep single-family housing production on a gradual upward trajectory in 2018, according to economists speaking recently at the NAHB International Builders’ Show® in Orlando, Fla. “We expect that tax reform will boost GDP growth to 2.6% in 2018, and this added economic activity will also bode well for housing, although there will be some transition effects in high-tax jurisdictions,” said Robert Dietz, chief economist for the National Association of Home Builders (NAHB). “Ongoing job creation, expected wage increases and tight existing home inventory will also boost the housing market in the year ahead.”
However, builders will continue to deal with ongoing supply-side headwinds this year that will dampen more robust growth. These factors include an increasing number of unfilled construction jobs, a shortage of buildable lots, and a slow growth in acquisition, development and construction loan activity that is failing to keep pace with rising demand.