Last year’s real estate housing market started out with sky-high home prices with historically low mortgage rates, which was an advantage for sellers. While the year started out on top, it quickly dwindled halfway through with home price growth decreasing and rates at an all-time high. Will 2019 see the same results? Here’s what you can expect to happen in the 2019 real estate market:
Increased Mortgage Rates
Mortgage rates have been increasing over the last couple of years; however, that will change in 2019 as the 30-year fixed mortgage rate projects to increase 5%, which is something we haven’t seen since 2008 when the rates were spiraling downwards due to the housing crisis.
The Rise of Millennial Home Buyers
Millennials are getting older, finding stable careers and eager to become homeowners. Not only are their household incomes increasing, but they also are looking to purchase homes in the middle to upper-middle class neighborhoods. Despite rising rates and an increase in prices, millennials will continue buying homes. According to experts, millennials will account for 45% of the housing market in 2019.
Home Prices Rise with Less Offers
Home prices have made a serious jump over the last couple of years and they are only expected to continue to rise. Along with increased mortgage rates, the combination of the two is likely to discourage those buyers who are on the fence about buying a home.
A Shift to the Suburbs
Millennial homebuyers are looking to part ways from higher urban rent and instead of looking at suburban areas. Majority of millennials are at the age where they’re ready to settle down, get married and start a family so they are looking at more single-family homes in already established neighborhoods.
The Rise of Technology
Tech startups are already incorporating AI into their market analysis. Machine learning is currently being used for building management, organization, and design. Technological innovations are already growing rapidly and advancing in the real estate industry which is a major trend to look out for in 2019.
National Rents Will Rise
With higher rates limiting the number of homes for potential buyers, rent rates are expected to rise. Potential buyers will be too financially stretched to buy, so their only option is to continue to rent.