Recently Fannie Mae and Freddie Mac announced conventional loan limits are being increased. FHA and VA made similar announcements to increase for their Standard mortgages. This is in reaction to the median cost for housing having gone up. So what’s in store for 2018 for Lane County and surrounding areas? After shaking the Magic 8 Ball a few times I’ve got a couple of predictions for 2018.
Competition Causes Growth
Job growth and employers competing for employees should lead to wage growth that will add support for modest increases in the cost of renting and purchasing homes in Oregon. Median-priced homes throughout most of Oregon will likely see an increase of 2%-3%. The exception being the Portland Metro area that will likely see another 4%-5% increase in housing. They just aren’t building homes fast enough to keep up with demand there.
Increased Interest Rates
Interest rates will increase. With job growth will come increased wages nationally and here for many Oregonians too. This will lead to higher inflation which the Fed is already anticipating. Expect mortgage interest rates to increase by .375%-.625% by the end of 2018. This will help keep overall home prices in check for most areas of Oregon.
Water is Good
We have a lot of water. Want to call it global warming or another name? The overall trend is that the weather is getting more extreme. In the southern US we are seeing longer dry seasons and droughts and in other parts the more adverse weather conditions. Oregon will continue to have a greater number of people moving to rather than moving away, to other parts of the country, being attracted to our moderate climate and our abundance of fresh water. These things will bode well for overall economic growth prospects for our NW.
Conventional Loan Limits Increase
You can thank the increase of conventional loan limits for my confidence in these predictions. I’m excited to see what the housing marketing does in the next two years. Here’s to growth!