What Home Buyers, Sellers And Investors Can Expect
There’s no doubt about it: the 2018 housing market has seen its ups and downs.
The year started with sky-high home prices, historically low mortgage rates and a definitive upper hand for sellers. In recent months though, home price growth has faltered, rates have risen to their highest point in nearly eight years, and favor has started to shift from seller to buyer.
Will these trends continue? Here’s what experts predict will happen in 2019 real estate market:
Mortgage rates will continue rising.
“Despite steady climbing for the past two years, mortgage rates remain lower than they were during most of the recession and below average for the type of strong economic growth we’ve been experiencing.” —Aaron Terrazas, director of economic research for Zillow
Millennials will keep buying homes — despite those rising rates.
The housing market in 2019 will be characterized by continued rising mortgage rates and surging millennial demand. Rising rates, by making housing less affordable, will likely deter certain potential homebuyers from the market. On the other hand, the largest cohort of millennials will be turning 29 next year, entering peak household formation and home-buying age, and contributing to the increase in first-time buyer demand.” — Odeta Kushi, senior economist for First American
Inventory troubles will ease — not too much, though.
“The wave of first-time home buyer demand will be met by somewhat higher inventory levels than in 2018. However, inventory will likely still remain tight nationally through 2019.” —Kushi
Home price growth will continue to slow.
“Right now, for 2019, we believe home price appreciation will likely slow to near 3%. This is based on the assumption that the recent pattern of increasing inventory levels will be sustained in the upcoming year.”
Buyers will see less competition, but that might not help first-timers.
“Buyers who are able to stay in the market will find less competition as more buyers are priced out but feel an increased sense of urgency to close before it gets even more expensive.” —Danielle Hale, Realtor.com
The Moral of the Story
All in all, housing is set for a slow-down next year, but as Kapfidze explained, that’s not necessarily a bad thing.
“The medium and long-term prospects for housing are good because demographics are going to continue to support demand,” he said. “With a slower price appreciation, incomes have an opportunity to catch up. With slower sales, inventory has an opportunity to normalize. A slowdown in 2019 creates a healthier housing market going forward.”
Want to learn more? Check out Forbes' input: Forbes Real Estate Forecast