Although no one can accurately predict the future of the real estate investing industry, a few housing market predictions can be made. Real estate experts, analysts, and economists have some top trends in mind when looking at what to expect in the 2019 housing market.
The Economy is Booming
When looking at the US market economy, economists believe it is on a roll. The return of high paying jobs, the abundance of career opportunities, high employment rates, lower taxes, and soon to be higher wages all contribute to this country’s strong economy. This, in turn, will stimulate the real estate market and increase the demand from homebuyers. People will want to buy homes when the economy is doing well.
Because the demand for homes is greater than this year’s home inventory, it would appear to be a seller’s market. Because of this, experts are led to believe new housing construction will be on the rise. Most housing market predictions point towards a slow recovery for the construction of homes, meaning there will not be enough homes to satisfy the demand from real estate buyers and the market trends of 2019 will suffer from a supply shortage. Home prices are also expected to climb in 2019, according to Zillow.*
Millennials Account for a Large Percentage of the Market
To debunk the popular belief that millennials are a generation of renters, market trends suggest they are actually more likely to become a home owner. Persistent demand from millennial buyers has been seen across the country as they are getting older, integrating further into the workforce with higher paying careers, and becoming more comfortable with taking out mortgages.
Mortgage Rates Will Increase
Mortgage rates have steadily risen throughout 2018. By June, the rate had reached 4.57%** This was an increase from the 2017 rate that hovered just below 4%. As 2019 approaches, it has been predicted the mortgage rates will increase even higher. The Mortgage Bankers Association and economists from Freddie Mac predict the average 30-year mortgage rates will rise to 5% by the end of 2019.*** Assuming that this were to happen, property investors might have to deal with a decline in home sales.
- By Megan Simmons,
Jan 09, 2019