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If there’s one thing that’s true about the housing market, it’s that it’s always changing. While we’ve seen a hot market over the last couple years, including sky-high home prices and low mortgage rates, growth is slowing.
Here are three trends real estate experts are predicting for the 2019 housing market forecast.
Rising Mortgage Rates
While mortgage rates have climbed over the last two years, they still remain lower than they were during most of the recession, according to Aaron Terrazas, director of economic research for Zillow. “That will change in 2019, as the 30-year, fixed-rate mortgage reaches 5.8 percent—territory not seen since the dark days of 2008 when rates were racing downward in response to the housing crisis,” Terrazas said.
Home Prices Cool
Experts at Redfin, a real estate brokerage company, predict home price growth will stay slow. The company’s forecasts have price growth settling around 3 percent, the lowest growth rate in years. With that said, sellers may have to adjust their price expectations, but that’s good for buyers.
“A few weeks ago I helped my home-buying customers get a bid accepted that would have gone straight to the bottom of a pile of offers earlier this year,” said San Francisco Redfin agent, Anna Coles. Coles said the offer, for a home in a desirable neighborhood, was for below list price and included a financing contingency, which allows buyers to back out of the contract without forfeiting their earnest money if the loan doesn’t get approved. That’s something that doesn’t happen often in a hot sellers’ market.
Millennials Are Big Buyers
When it comes to buyers, millennials are predicted to make up the largest segment in 2019, according to realtor.com. The real estate website says while first-time buyers will struggle this year, older millennial move-up buyers have more options in mid- to upper-level housing prices.
“Millennials are also likely to make up the largest share of home buyers for the next decade as their housing needs adjust over time,” the company notes.