What will 2018 bring for homebuilders?
ORLANDO, Fla. – Jan. 9, 2018 – Realtor.com delivered housing economic insights for the builder community by releasing a special edition of its 2018 Housing Forecast at The NAHB International Builders’ Show going on this week in Orlando.
Key takeaways for builders in 2018
- Entry-level home construction is a huge opportunity – Entry-level homes will continue to see price gains due to the larger number of buyers who can afford them and more limited homes available for sale in this price range.
- Millennials to gain market share in all home price segments – With the largest cohort of millennials expected to turn 30 in 2020, their homeownership market share is expected to increase. As they age into peak family forming years, their top housing priorities will shift from proximity to urban life, to more space and quality schools.
- Southern markets predicted to lead sales growth – Strong economies and healthy building levels will help drive Southern markets to beat the national average home sales growth. Builders who can adapt to regulatory hurdles in more challenging Western markets will find that prices still outperform national average growth in this region.
- The tax bill is a game changer – With the passing of the Tax Cuts and Jobs Act, the immediate wealth and income effect of tax cuts will likely stimulate demand and increased production in the short term. However, it could lead to fewer sales over the long term and negatively impact prices over time in markets with higher prices and property taxes. In addition, economic capacity constraints could kick in with inflation as the Fed more aggressively increments interest rate increases.
© 2018 Florida Realtors®