Do you plan to buy a house in 2019? The real estate industry is always changing from season to season and year to year. This coming year things won’t be quite the same, and home buyers should be ready for it.
One of the most important things you can do, especially if you’re a first-time buyer, is to get to know your local market. The points below are based on national trends, but every market is unique. Some of the market predictions may apply to your area while others don’t at all. Checking monthly market statistic reports and talking with a local real estate agent can help you become familiar with what’s happening before you buy.
5 Real Estate Trends to Expect in 2019
Freddie Mac recently put out a real estate market forecast that was a bit of a mixed bag. The general consensus is that the economy and job market is strong, which is good for the industry. However, there are signs that things are cooling off a bit in some areas. There should be growth in the year ahead, but it will be more modest than the years before.
More Markets Will Be Balanced and Buyer-Friendly
For several years now, many cities have been in a seller’s market. With little building, looser lending and buyers that wanted to take advantage of super low-interest rates, supply and demand tipped in the favor of sellers. But many industry experts believe that in 2019 things will begin to balance out a bit and may even tip towards being a buyer’s market in some areas.
Analysts who were surveyed by Zillow believed that the Midwest would become a buyer’s market in 2019, and more parts of the country will continue in that direction in 2020.
More New Housing Starts Will Help With Supply
By mid-2018 new home sales were up 7.4%. That’s in part due to the increase in new housing starts. At the end of June this year new housing starts were up 7.8% year-over-year. Analysts anticipate that new housing starts will increase by 8% in 2019 as well. Buyers that are looking a new home should have more options than the year before.
Interest Rates Will Likely Be A Little Higher
You may have heard that the Federal Reserve is increasing interest rates little by little. Mortgage rates went from 3.99% at the beginning on January to 4.66% in May. Things have stabilized, but rates are expected to creep up to 5.1% by the end of 2019. This trend will prompt many people to buy a home in 2019 while rates are still low. The NerdWallet 2018 Home Buyer Report found that 82% of Millennials plan to make home buying a priority partly due to the rise in interest rates.
Home Prices Will Appreciate But At A Slower Pace
Even though things are beginning to look a little more favorable for buyers in the coming years, home prices are still appreciating. It’s another trend that’s encouraging people to buy a home. The reasoning is it’s better to buy sooner rather than later to keep the cost of homeownership as low as possible.
While prices rose by 8.1% from July 2017 to July 2018, early predictions are that appreciation will slow to 6.5% from July 2018 to July 2019. Of course, this is for the nation at large and will vary by location.
Time to Close is Getting Shorter
Research from Ellie Mae shows that in the last five years the time to close has gotten a week shorter. This is important when you’re trying to plan a move or have to sell another home before you can buy a new house.
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