Realtor.com 2019 forecast: Expect some challenges
Nov. 28, 2018 – Rising interest rates and home prices will make it more difficult to buy or sell a home next year, according to realtor.com’s 2019 housing forecast.
The 2019 housing market will see modest inventory gains – but with mortgage rates expected to hit 5.5 percent by the end of the year, monthly mortgage payments will rise 8 percent. That will put homeownership more out of reach, especially for younger Gen-Z, millennial and other first-time homebuyers.
Upscale homes in high-growth markets, however, will provide more opportunities for buyers.
Realtor.com 2019 forecasts
- Home price growth will continue to slow with a forecasted increase of 2.2 percent
- Inventory increases will remain moderate – less than a 7 percent gain
- High-priced markets, however, will see double-digit inventory gains
- Millennials will account for 45 percent of mortgages in 2019 vs. 17 percent for boomers
- New tax plan will be good for renters, mixed for homeowners
“Inventory will continue to increase next year, but unless there is a major shift in the economic trajectory, we don’t expect a buyer’s market on the horizon within the next five years,” says Danielle Hale, chief economist for realtor.com. “Unfortunately for buyers, it’s only going to get more costly to buy, especially the most-demanded entry level real estate. To be successful, buyers should think through how they’ll adapt to higher rates and prices.”
What will 2019 be like for buyers?
Buying a home will be an even more expensive undertaking as mortgage rates and home prices increase – but buyers who can stay in the market will find less competition yet feel an increased sense of urgency to close before it gets even more expensive.
Buyers’ biggest largest struggle next year will be reconciling wants, needs, and budget versus the heavy competition of 2018. Although the number of homes for sale is increasing, the majority is focused on the mid-to-higher-end price tier – not entry-level. Rising mortgage rates and prices will keep a lot of new inventory out of their budget.
What will 2019 be like for sellers?
Although it remains a seller’s market, sellers need to note the increasing competition, and shouldn’t necessarily expect to name their price and get it in full – a change from the past few years.
Above-median priced sellers may find it takes longer to sell and additional incentives, such as price cuts or other offerings. With less demand in the market, there will be fewer bidding wars and multiple offers.
However, with inventory expected to remain limited in most markets, sellers who price competitively can still walk away with a handsome amount of profit – just not the price jumps observed in previous years.
© 2018 Florida Realtors®