For the real estate industry, 2018 was quite the ride. The year began with record low mortgage rates and high home prices. It was fully a seller’s market.
Then at the end of the year, the real estate market started to shift. Rates rose to higher than they’d been in almost eight years, price increases slowed, and the buyer started to reclaim some power. Buyers and sellers alike entered 2019 without a firm grasp on what might happen.
Here are some of the experts’ housing market predictions.
1. Prices will continue to rise, but slowly.
According to National Association of Realtors‘ chief economist Lawrence Yun, home prices will track gradually upwards in the coming year. Prices have fallen in a select few markets, but 90 percent of markets have experienced increased property values. As a whole, the housing market continues on a consistent path of long-term growth.
Yun expects the median home price to rise about 3.1 percent to $266,800 in 2019. Sales volumes, meanwhile, will likely increase by 1 percent to 5.4 million.
2. Interest rates will keep rising.
In 2018, mortgage rates increased nearly one percentage point to 4.7 percent. Experts are suggesting that rates could hit 5 percent before the curtains close on 2019. However, according to the chief economist of the Mortgage Bankers Association, the signs point to a gradual increase.
Homeowners who already have fixed-rate mortgages won’t see a change, but anyone with an adjustable-rate mortgage will probably pay more – a $6 increase per federal rate hike, to be specific.
3. Inventory will increase slightly.
Forecasts suggest that the housing shortage will ease up a bit in 2019, but most of the new inventory will be in the $250,000-and-up price bracket. Housing demands will remain high in the starter home market.
There will be more manufactured homes, colloquially known as mobile homes, which you can get for an average of $70,600 plus land costs. The number of available townhouses is also likely to increase, thanks to first-time urban buyers seeking the satisfaction of unlocking their own front doors.
Whose Market Is It, Anyway?
Buyers will watch mortgage rates and housing prices rise. More affluent buyers may have more choice of properties, but first-time and lower-end home buyers will still have to work to find something suitable.
Sellers will be too late to enjoy the extremity of the 2018 seller’s market, mostly because the housing shortage is on its way down. Don’t expect to be able to have multiple buyers competing for your home and have it snapped up within the week. At least not in most markets.
Remember, though, if 2018 was any indication, we could be in a very different place by the end of the year. Watch for ongoing real estate market predictions. And make sure you’re getting good advice from industry experts, like The Real Estate Book, whether you’re buying or selling.