2018 Mortgage Trends and What They Mean for You

Keep these five mortgage trends in mind whether you’re in the market to buy a new home or sell a property, refinance your current home loan, or tap into your home’s equity with a home equity line of credit.

Kallee Feuz Jan 16, 2018

Coming off the best mortgage market year in a decade, 2018 looks to be another strong year for home sales. Whether you’re in the market to buy or sell a house, refinance your mortgage, or tap into your home’s equity, consider the five following housing trends forecast for 2018.

Mortgage Trend 1: Buying a house will cost you a little more than last year.

Home prices are expected to continue marching upward in 2018, but not as fast as in 2017.  Mortgage giant Freddie Mac forecasts average U.S. house price growth of 4.9 percent this year, tempered by increased housing supply and moderate mortgage rate hikes. estimates average home price appreciation near 3.2 percent in 2018, down from 5.5 percent last year.

Meanwhile, the Salt Lake City and Boise metro areas continue to be among the hottest housing markets in the U.S., with predicted house price growth of 4.5 percent and 5 percent, respectively. The Salt Lake City area was recently ranked sixth nationally by in forecasted home sales growth and price gains for 2018, while the Boise area landed 31st among the 100 largest metro areas. 

Mortgage Trend 2: You’ll have more - but still limited - housing options.

If you’re shopping for a higher-priced home, 2018 may bring more buying options in the $350,000-plus range. While limited housing inventory will remain a persistent problem, industry experts predict inventory increases in higher-priced segments following the spring home-buying season. Freddie Mac forecasts that housing construction will gradually pick up this year, helping to supply more homes to inventory-starved markets. Unfortunately, a shortage of affordable housing will likely continue to plague both the Salt Lake City and Boise areas. 

Mortgage Trend 3: Buying or refinancing early in the year may save you money on interest.

While mortgage rates will likely remain low by historical standards, they are expected to creep up by roughly half of 1 percent by the year’s end. The Mortgage Bankers Association expects the 30-year fixed-rate mortgage will rise to 4.6 percent in 2018, and the National Association of Realtors predicts it will be around 4.5 percent by the end of the year. Based on these forecasts, sooner may be better when it comes to refinancing a mortgage. To determine whether a mortgage refinance is right for you, use Zions Bank’s mortgage refinance calculator or talk with a lending expert.

Mortgage Trend 4: You may find yourself with more home equity.

Rising home equity in 2018 may open up increased borrowing opportunities for existing home owners, whether in the form of a home equity loan, home equity line of credit, or cash-out refinance. Because these loans are secured by your home, the interest rate is often lower than with other types of debt. By borrowing against the equity in your home, you could pay for home improvements, fund your child’s tuition, or consolidate debt. You may want to consider a Zions Bank home equity loan or a home equity line of credit from Zions Bank.

Mortgage Trend 5: New tax law could impact your mortgage interest deduction and property tax deductions.

The “Tax Cuts and Jobs Act,” signed into law in December, limits the state and local tax deduction to a combined $10,000 for income, sales, and property taxes. Additionally, those who took out a mortgage after Dec. 14, 2017, will be subject to new $750,000 cap on deductible mortgage debt. (Loans of up to $1 million taken out on or before that date are grandfathered and are not subject to the limit.) 

Also with the new tax law, interest paid on home-equity loans will no longer be deductible beginning in 2018. Check with your tax adviser to understand how new tax law may affect your tax situation.

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