As homebuyers are begin to look to the new year ahead, they may be wondering what’s in the forecast for the real estate market? Will there be a rise in home prices, will it decline or remain stable? Who will benefit most, the buyer or seller?
Four Things that are Likely to Happen in the Real Estate Market in 2019.
The rise in home prices across the nation is due to an imbalance in the supply and demand situation within the housing markets, which has created a challenge for buyers. During the first part of 2018, there was a steady increase in mortgage rates but this leveled off in early summer.
It is now the last quarter in the year. What lies behind the horizon? It is a fact that no one can accurately forecast future housing conditions. Champions Gate real estate can make a few educated guesses.
Le at us look at the four of them presented here.
- We could see an intensification in new-home construction.
There has been an increase in building permits across the nation, which could result in further increase in the construction of new homes in 2019.
The National Association of Home Builders stated in a June 2018 report that there was 279,302 permits issued for single-family housing during the first four months of 2018. When calculated on a year-to-year basis there is an increase of 8.4 % when compared with the 257,719 level in April of 2017.
The long wait time between the filing of a construction permit and the end of the project will undoubtedly create supply scarcities, where there is an inadequate listing of homes for sale to satisfy homebuyers demand.
- Most markets will tend to prefer sellers to buyers.
During 2018 and 2018 there was a nationwide inventory shortage housing, which affected most housing markets. The limited supply of houses has created an imbalance within the supply and demand situation and this will continue to place increasing pressure on 2019 home prices.
These trends may vary in different areas. There are real estate market across the country that are more stable due to their adequate supply and demand situation. There is however, a low level of inventory in most cities across the nation, with the west experiencing the tightest markets.
- Mortgage rates might reach 5%, for a 30-year loan.
Although mortgage rates are higher now than at the beginning of the year, experts predict that they will increase higher towards the end of 2018. Let’s do a little history: In 2017, a 30-year fixed mortgage’s average rate floated below 4 percent.
By early 2018, there was a steady climb during the first three months. By the first week in July 2018, the average 30-year mortgage rate increased to 4.52 percent.
It is evident then that rates are climbing higher. This begs the question, what will happen to real estate market in 2019 if rates continue to climb upward. Read more here.
By mid-year 2018, the updated long-range forecast by the Mortgage Bankers Association (MBA) states that there would be 4.9 percent rise in average 30-year mortgage rates and this would continue into 2019. Freddie Mac economists made a similar prediction recently.
Rising rates may result in a decline in home purchases in future months. However, this may not greatly influence real estate sales. With a vibrant economy and high employment rate, there could be a steady demand for houses in many housing markets.
- Increase in Home prices will continue in most U.S. cities.
Based on the existing supply-and-demand condition, it is quite likely that the prices for homes will continue to escalate throughout 2019. This is definitely not a new trend but the continuation of the current situation. Check this URL: https://www.thestreet.com/story/14432380/1/5-trends-shaping-2018-real-estate-market.html
Zillow states that there was 8.1 percent growth in US medium home prices for the previous year. They gave a further prediction of rising prices of up to 6.5 percent for the ensuing 12 months. This forecast came out in July 2018; therefore, it extends into summer of 2019.
This however, varies from region to region. While some towns may experience slight gains, others could experience huge hike in home prices.
FYI: The purpose of this article is to try to provide an answer to the question; what will happen to the real estate market in 2019? Since nobody can provide a complete accurate prediction, the intent of this article is for education purposes only, not to offer financial advice.