What will 2019 bring? What will rates do? Will home values go up or down?4 Predictions for Real Estate in 2019
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
We are headed into the colder part of the year, the kids are back in school, and the holidays will soon be upon us. If you watch the news they will tell you that housing inventory is back up and the market is turning to be more buyer friendly. That’s always followed up with, “are we do for another crash?” The main indicator of where things...
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I will start off with the most important thing for you to take away from this update. NOW is the time to get a house. Mortgage rates are at their highest point in 7 years and are continuing to go up so the cost of the money will not be going down. However, we are finally starting to see some more inventory for houses come on the market. ...