2019 Predictions – National
The start of 2018 to the end of 2018 saw a significant shift in the national real estate market. Sellers benefited from low rates and high demand at the beginning of the year, and as the year wrapped up, buyers gained control as prices dropped to accommodate higher rates. National figures from NAR and realtor.com’s market outlook say that 2019 will see a 2% decrease in the number of home sales and a 2.2% increase in the median home price.
What do economists expect to drive those results?
- Mortgage rates will rise to 5.5 – 5.8% in conjunction with economic strength.
- The slow down of sales from higher rates means prices will not make significant gains but stay the same or lower. Owners who do not sell will continue to build equity and add value to their home in the future.
- Slow sales expectations combined with increased demand from Millennials means that inventory levels are not likely to decrease or rise significantly.
- Millennials will drive first-time homebuyer demand as more and more reach their late 20s and household formation age.
- Would-be buyers priced out due to rates or lack of inventory will increase demand for rentals and prices will rise. However, investment in new rental construction across the country means the increase is only temporary.