Homeownership to rise in 2018 says Trulia economist

The US homeownership rate will increase in the coming year despite the challenge of the inventory squeeze

Homeownership to rise in 2018 says Trulia economist
The US homeownership rate will increase in the coming year despite the challenge of the inventory squeeze.

That’s one of the key predictions of Trulia’s chief economist Ralph McLaughlin who says that 2018 will build on the homeownership rate rise of 2017.

"Homeownership will continue its comeback story in 2018 as Gen Xers who were hard-hit during the Great Recession become homeowners again, and as more millennials buy homes for the first time. But homebuyers won't be without challenges as they'll still face low inventory, slow wage growth and expensive starter homes. For millennials, they have the added hurdle of saving enough money to make a down payment and make competitive offers amid rising home prices," McLaughlin says.

Among his other predictions for 2018 is a potential cooling of coastal markets due to the likely tax overhaul which could impact expansive, high-tax markets in the Pacific West and Northeast.

Data from Trulia’s American Dream Survey highlights the obstacle of rising home prices for potential buyers. Americans are split on whether homebuying will be better or worse in 2018 (25% each) with 41% of respondents saying they will wait at least 2 years before buying. Just 10% plan to buy next year.

There is also rising concern about natural disasters following the floods, hurricanes, and wildfires of 2017.

"Amid 2017's slew of natural disasters, future homebuyers may rethink where they live. But the desire to become a homeowner remains strong enough so these concerns are only likely to deter demand in the most vulnerable of locales."

Top 10 markets to watch in 2018

Considering strong employment growth, low vacancy rates, high affordability of starter homes, demographics and home search data; Trulia believes these are the markets to watch next year:
  1. Grand Rapids, Mich.
  2. Nashville, Tenn.
  3. Raleigh, N.C.
  4. El Paso, Texas
  5. San Antonio, Texas
  6. Fort Worth, Texas
  7. Austin, Texas
  8. Columbus, Ohio
  9. Madison, Wis.
  10. Cincinnati, Ohio