The coming of a new year inevitably brings about moments of reflection on months passed and gives us the opportunity to envision where things will head over the course of the next year. As we begin our journey into 2019 and prepare to set—and achieve—our real estate goals, let’s take a look at the 2019 Housing Market Forecast with the experts at Forbes magazine and realtor.com®.
1. Mortgage rate hikes will continue to impact affordability.
2. Home prices will rise, but the rate will be less steep than in previous years, estimated at 2.2 percent nationally.
3. Inventory, too, will grow, but also at a low rate, of about 7 percent.
4. The frenetic conditions of multiple offers and rise-up bidding wars are in the rearview.
5. Millennials will continue to make their presence known, comprising the largest segment of homebuyers into 2019 and beyond.
Realtor.com reports that mortgage rates could soar to 5.5 percent by the end of 2019 and according to Forbes, “what that means in real money is the average home will cost 8% more per month than in 2018.” This could contribute to a slight decline in home sales, by 2 percent or so.
As Danielle Hale, chief economist at realtor.com said in a statement, “unfortunately, it’s only going to cost even more to buy, especially in the entry level market. To be successful, buyers should think through how they’ll adapt to higher rates of prices.”
While inventory is expected to increase slightly on a national basis, it will not be by much, estimated at just under 7 percent. Higher-end homes in hot markets, however, such as the Seattle-Bellevue-Tacoma metro region, will likely grow by double-digits.
2019 should remain a sellers’ market for the entire year, but it will operate entirely different than the one in 2018. Most notably, days on market will increase and sellers will need to price their homes appropriately or face the possibility that their listing will linger without much buyer interest.
Millennials will continue to play an integral role in the market and are expected to make up 45 percent of the share of new mortgages in the coming year, compared to 37 percent of Generation X and 17 percent of Baby Boomers.
One factor that is hard to make predictions around? The implications of the revised tax plan, which will affect homeowners and renters for the first time when tax season comes around in April.