Whether you are looking to buy, sell, or rent a house in 2019, there are some factors that you need to seriously consider before you make any decisions.
Traditionally, the housing market has been a limited number of homes at high prices. Also, keep in mind that rising interest rates can also throw a wrench into your plans.
Mortgage Rates
At this point, mortgage rates are at an all-time high since 2011. While this typically is a good thing and means that the economy is doing well, it can certainly be a deterrent for those looking to purchase a new home. In 2018, the Federal Reserve increased the interest rates three times, and have also stated that they plan to increase them more than once in the upcoming 2019 year.
Because of this, some consumers are putting off purchasing a house. While the increases can be frustrating, it isn’t actually too bad when you look at the bigger picture. With the higher rates, homeowners would just be paying an extra $50-$100 a month to their house payment.
Will Home Price Continue to Increase?
With a decline in homebuyers, this will most likely cause slow growth in home prices across the country. This is particularly true in smaller metro areas, potentially Orlando. If you are looking to sell your house, you may be more cautious putting your house on the market because that means you’ll need to buy a new home.
With a new home comes a new mortgage and a more “up-to-date” interest rate. This will continue to cause a low inventory of homes while everyone tries to get used to the new interest rates. However, the good news is that while homeowners are continuing to build equity while paying their mortgage each month, this will eventually lead to higher profits when they do in fact decide to sell their homes.
What does this mean for First-TIme Homebuyers?
If you are interested in being a first-time homeowner, it may be hard to take that leap from the comfort of renting. The stress of mortgage rates and high home prices could definitely make you apprehensive. However, renters do benefit from the decline in the rental demand. The U.S. Census Bureau reported that the homeownership rate across the country is 64.4% as the third quarter of 2018.
This rate has consistently been increasing after recently seeing 50-year-lows. So since homeownership is rising, renters have fewer people to compete with for spaces, and more bargaining room when it comes to renting.
2019 Outlook
So if your New Year’s Resolution is to make big changes in 2019, get ready! If you are looking to sell, make sure you price your home realistically, but be aware that you may need to price aggressively, or offer some great perks.
Competition can be fierce! Even though it is still technically a seller’s market, it’s not to the extent as it was earlier in 2018. If you are looking to buy a home in 2019, just know that it’s okay to take your time. 2019 will bring less competition and more inventory. Ensure you make smart financial decisions and find a house that best fits your budget.
Sources:
US News. “What to Expect from the Housing Market in 2019”. Retrieved from: https://realestate.usnews.com/real-estate/articles/what-to-expect-from-the-housing-market December 21, 2018.
USA Today. “5 Housing Takeaways: What Should You Expect From Home Sales in 2019”. Retrieved from: https://www.usatoday.com/story/money/2018/12/21/housing-market-predictions-2019/2218094002/. December 21, 2018.
Forbes. “2019 Real Estate Forecast: What Homebuyers, Sellers, and Investors Can Expect”. Retrieved from: https://www.forbes.com/sites/alyyale/2018/12/06/2019-real-estate-forecast-what-home-buyers-sellers-and-investors-can-expect/#526e042570d9. December 21, 2018.
