In the year 2018, the housing market had its ups and downs!
The year started with sky-rocketing home prices, historically low mortgage rates and an explicit upper hand for sellers. Though in recent months, home price growth has paused, rates have risen to their highest point in almost eight years, and favor has started to shift from seller to buyer.
Are these trends going to continue in the coming year? Is housing experience going to be the same wild ride in the new year? Here's what experts has to say about 2019 real estate market:
Mortgage rates will continue rising-
Despite steady climbing for the past 2 years, mortgage rates will remain lower than they were during most of the recession and below average for the type of robust economic growth we have been experiencing. The same will change in the coming year as the 30-year, fixed rate mortgage reaches 5.8% — territory not seen since the bad days of 2008 when rates were descending in response to the housing crisis.
Millennials will keep buying homes — despite those rising rates-
The housing market in 2019 will be defined by continued ascending mortgage rates and spiking millennial demand. Rising rates will make purchasing real estate less affordable and, will likely discourage certain potential homebuyers from the market. On the other hand, the largest group of millennials will be turning 29 next year, entering peak home-buying age, thereby contributing to the increase in first-time buyer demand.
Millennials will continue being the largest segment of buyers next year, accounting for 45% of mortgages, compared to 37% of Gen Xers and 17% of Boomers, While first-timers will struggle next year, older Millennial buyers will enjoy numerous options in the mid-to upper-tier price plans and will make up the most of Millennials who close in 2019. All the more, 2020 is expected to be the summit Millennial home buying year with the greatest cohort of millennials turning 30 years old. Millennials are also likely to make up the biggest share of home buyers for the next decade as their housing requirements adjust over time.
With the burn-out in home prices and soaring rates, housing has been going toward a relaxed trend this year and is expected to sustain through 2019. Battered buyers may have increased prospects in the upcoming year, but will still battle with cost and inventory constraints.
The year 2019 looks to be a crucial year as the market calms and changes from one marked by healthy recovery into one more in line with traditional norms and more impartial between buyers, sellers, and renters.
We are moving from an astonishingly ardent real estate market to a more normalized one. Is this a deep breath for the business before it starts to march back up, or the starting phase of a genuine downturn in real estate values? What matters most is paying attention to your local market and your needs. People, in general, buy their home because of their needs and wants and not because of the timing in the market.
With the boom in the housing segment, insurance companies can also expect growth in people buying home insurance policies. A home insurance policy safeguards your house from damages caused due to various unfortunate events.