2019 is literally right around the corner, and as of the publishing of this post, less than 12 hours away. 2017 and even into 2018 proved to be really positive for the housing market but now we're seeing different trends and many experts are unsure of where this is going to go. Throughout the last two years home prices have made a 10% jump in values but in 2019 we might be seeing a slower pace. Home prices are still on the rise but with fewer offers.
The slowdown is due to increased mortgage interest rates. Our interest rates are now higher than they've been in several years, even though they are still relatively low. Buyers are so eager and when the time comes for first-time homebuyers to jump into the market, they're still doing so. New home construction is projected to increase by about 8% over the next year but there may not be enough new house is to go around in some suburban areas. Construction companies may not have the manpower to keep up with demand. What is all this mean? It looks like new construction that is available will sell for a higher price and resell values.
For sellers of even resell homes, a nice profit might be on the horizon. The number of homes sold over the next year is still expected to rise even if it is at a slower pace. Many buyers are being priced right out of the market which could lead to fewer offers for homeowners.
This is why it's important to be aware of your competition. You really want your home to stand out because you might not get multiple offers situations.
So what do higher prices mean for buyers? If you're going to buy a home, you need to understand exactly how much home you can afford. Don't get pulled into the maxing out your budget routine and don't rush into a home purchase it just doesn't make financial sense. You certainly don't want to be stuck with the home you can't sell in 5 to 10 years.
Look into putting at least 10% down on a 15 to 20-year fixed-rate conventional loan. This will stable your budget and it will give you more to work with on a monthly basis, paying off your home loan much faster with lower interest payments.
Speaking of interest, the Federal Reserve increased interest rates three times in 2018 and there are more plans to increase them in 2019, which means that buyers that have been on the fence shouldn't wait too much longer.
In better markets throughout the country, home prices and the real estate market will continue to grow but probably not as fast as we have seen it in the last 4 to 5 years. Homeowners may be a little hesitant to put their home on the market because it means that they need to purchase a new house as well. Instead, we might be seeing a lot of homeowners refinancing or building equity to improve the property and increase the value later on.
Overawe'rewere looking at a slowing housing market but nothing stagnant or much of anything to be concerned about. Selling in 2019 might be a really great option for you and when it comes to buying, the sooner the better.