2017 is now officially over and 2018 has begun. As the year comes into full swing, many experts continue to give their predictions for the housing market during the new year.

American Enterprise Institute's Center on Housing Markets and Finance Co-director Edward Pinto gave four points he expects to see from the housing market in 2018.

Many of his predictions, including low inventory and rising home prices, are shared by other housing experts. However, Pinto forecasted home prices will increase at a faster rate in 2018, while other experts expect they will slow down.

1. The historically tight supply of single-family homes will tighten further in 2018 after hitting a record low in November 2017: On December 21, 2017, the National Association of Realtors announced that November 2017 remaining inventory of existing homes for sale hit a record low of 3.4 months, eclipsing the prior record of 3.5 months reached in both January 2005 and January 2017. Expect new lows to be recorded for December 2017 and January 2018. January is projected to come in at around three months.  This tight supply trend has been going on for more than five years.

2. The national home price boom that began in mid-2012, will continue, and given the unprecedented low levels of inventory, will even accelerate further: Expect year-over-year increases of 6.25% to 6.75%, up from about 6% to 6.5% in 2017. The substantial reduction in the utilization of the mortgage interest deduction and commensurate reduction in subsidies, will somewhat reduce upward pressure on home prices. Without the tax act, the prediction for 2018 home price increase would have been even higher: 6.75% to 7.25%.

3. First-time buyers will face even higher home price gains for entry level homes: Expect year-over-year gains for the bottom third of homes to come in at 10.5% to 11% for 2018, December 2018 over December 2017 based on 16 tiered HPI from CoreLogic Case Shiller. At current levels of wage growth, this boom in entry level home prices is ultimately unsustainable.

4. First-time buyers will continue take on even more leverage in an effort to keep up with the out-sized home price gains on entry level homes: The AEI First-Time Buyer National Mortgage Risk Index is expected to rise to 17.1% for September 2018 agency originations, up from to 16.4% for September 2017. Risk scores above 12% have a high risk of default under severe economic stress.

To see 2018 forecasts from other experts, click here