4 Predictions for Real Estate in 2019
What will 2019 bring? What will rates do? Will home values go up or down? I anticipate a lot of the current trends to carry over into 2019. Here are the top 4 things to expect:
- The winter months typically see a rise in home inventory and we see a shift more towards a “buyer’s” market. Once the spring hits, this isn’t likely to last. We will see more buyers hit the market and sellers will benefit from a lack of inventory. If you are thinking of buying, you will still get the best deal through the winter. 2019 is likely to still favor sellers.
- Rates will continue to increase. 2018 started with an average 30-year fixed rate below 4%. Rates now hover right around 5% on the average. This will cause the purchasing power for some homeowners to decrease, however, home sales should still trend at the same pace. The rate of employment and rent rates correlate more closely with home sales than the actual mortgage interest rates so this may not hurt sales much. The exception will be areas where there is a lower median income and higher unemployment.
- Values will continue to rise. When we have demand outweighing supply there is an upward pressure on home prices. We will see much bigger movement in the areas where employment and income are strong and increasing since there will be more buyers in a position to buy at the increased prices. Most pundits have said that purchase mortgages will dominate the market over refinances, however, my opinion is that while that is true, these newfound equity positions will still make it a strong market to refinance in. There are people that have needed access to money (consumer debt, home upgrades, etc.) that haven’t been able to access it for years. Even though rates at 5% may be higher than they currently have, it may make sense to accomplish their other financial goals.
- Mortgage underwriting will loosen. Bottom line is that banks need to make money. If rates go up and that lowers refinances, inventory is low and that lowers home purchases, they will come up with new programs and less stringent guidelines to make up that shortfall.
Do you have questions about buying or refinancing your current home and want to know the best course of action? Contact us anytime at firstname.lastname@example.org or (978) 575-3053.