What will the housing market be like in 2019?

What will the housing market be like in 2019?
You may be wondering what the housing market will look like in 2019 - especially if you're considering a home purchase.

Real estate is a lot like the stock market: It's an outlet for investment, valuable and highly unpredictable. What's happening in one part of the country may be a different story in another.

But if there are any authorities qualified to make some educated guesses on the subject, it's Freddie Mac and the National Association of Realtors.

Here's what these two esteemed organizations have to say about what lies ahead for the housing market in 2019.

Homebuying to pull back in 2019

For the most part, residential real estate purchases are forecast to continue where they left off in 2018 by further evening out. That's according to NAR Chief Economist Lawrence Yun, who recently spoke at the 2018 Realtors Conference & Expo held in Boston. Yet despite the slowdown in buying, asking values will most likely continue their steady ascent.

"Ninety percent of markets are experiencing price gains while very few are experiencing consistent price declines," Yun explained. "2017 was the best year for home sales in 10 years, and 2018 is only down 1.5 percent year to date.

Yun further stated that, much like this passing year, the dip in homebuying activity will likely be rather temperate, as opposed to dramatic.

Making a similar prognosis about how things will shake out in 2019 is Sam Khater, chief economist at mortgage giant Freddie Mac. However, he's more inclined to believe that activity will pick up in intensity as the year progresses, particularly among millennials.

"While we expect the weakness in housing activity to extend the next few months as the market absorbs the recent uptick in mortgage rates, the combination of strong economic growth and millennials moving toward homeownership should help home sales regain momentum and rise modestly in 2019," Khater said.

Will mortgage rates rise or fall next year?

Among the biggest unknowns in the housing market are mortgage rates, given they fluctuate virtually every day. In early December - the most recent data available - 30-year fixed-rate mortgages averaged 4.75 percent, down from the previous seven-day period (4.81 percent) but up compared to this time last year (3.94 percent).

What direction are they headed in 2019? Freddie Mac - along with most other housing authorities - suspect rates will continue to move higher, perhaps surpassing 5 percent.

Should rates indeed rise, it's important to stress that they're still rather low in comparison to previous years. As recently as October 2008, 30-year FRMs were above 6 percent, based on archived Freddie Mac data. And in the late autumn of 1990, long-term FRMs averaged approximately 10 percent.

In other words, in terms of borrowing money, interest rates remain very affordable and are expected to stay that way for the foreseeable future.

As for how much the typical single-family house will sell for in 2019, Yun predicted the median will reach $266,800. That's a 3 percent increase from 2018, but below the $274,000 anticipated in 2020. In short, "home price appreciation will slow down … but prices will continue to rise," Yun said.

All real estate is local, so while these predictions on the housing market are informed opinions, the best source to go to on the housing climate in your area is your trusted Loan Officer. They should be able to give you a more nuanced picture of what conditions will be like in 2019.

Interested in buying or selling? Buying & selling property in today’s market is a multi-faceted event. Let our team of seasoned experts use their experience & professionalism to guide you through the entire sale. The Debbie Reed Team has the track record you’ve been looking for and we hope to work with you soon!    Click here for more information about The Debbie Reed Team. 

This article brought to you courtesy of Tim Hidell, RMS Mortgage. For full article, please click here.