This 2019 it will be a tricky year for property buyers. Do you want to know why? It is because they will continue to vie for a lesser supply of properties.
Plus, mortgages rates and home prices are, believe it or not, likely to increase or move upward, peeving affordability. As we move forward to a new year, many home buyers are looking forward to the mortgage trends.
As a home buyer, it is imperative to know and learn the mortgage trends that will likely to happen in 2019. By that, you can prepare yourself for what’s to come. For a little help, here are five mortgage and housing trends to look out for in 2019.
2019 Will Be A Seller’s Market
For the past years, real estate has been, for the most part, a seller’s market. Meaning, there are more home buyers compared to the properties for sale. Thus, putting the negotiating power in the property seller’s direction.
And this 2019, it will still be a seller’s market. However, it will be a bad situation for property buyers if it will still be a seller’s market this year.
But, fortunately, there is a little hope for home buyers. In 2019, the supply of properties will rise. However, the problem is that the demand is also, for the most part, expected to exceed supply, even though there will be more properties for sale.
According to Realtor.com, although the housing situation isn’t getting worse for property buyers, it is also not doing good in most markets. Furthermore, according to Freddie Mac, unless housing construction improves, property costs will ramp up as well, limiting home formation and restricting a lot of people for homeownership.
Housing Costs Will Increase
Housing costs are, like it or not, expected to bring bad news, good news in 2019. So, to start off, the bad news is that the housing costs will keep ramping up. But the good news is that the housing prices will not increase as fast as they did in the past year.
According to the liege economist for the NAR or National Association of Realtors Lawrence Yun, housing cost appreciation will decline, but they will continue to increase. According to him, it is expected that the housing costs will increase in 2019, particularly 2.5 percent, with a median of $265,200.
If you compare it in the past year, it was about a 4.7 percent rise in housing prices, to a median of $258,700. Moreover, Realtor.com and CoreLogic also forecast a slowdown in housing costs in 2019.
Homes Tend To Get Smaller
From a house purchaser’s point of view, most markets require more houses available to be purchased, and they should be on the reasonable end of the value scale. All things considered, a lot of first-time property buyers purchase short-term homes rather than forever homes, with costs under the area’s median. There are indications that property builders are reacting by building more affordable, smaller homes.
According to Robert Dietz, expert for the National Association of Home Builders, proceeding with a multiyear trend, single-family home sizes diminished amid the second from last quarter of 2018. New home size has been slumping over the past three years because of a steady move to additional entry-level housing development.
As indicated by the U.S. Registration Bureau, the middle size of single-family homes began in the second from last quarter of 2018 was 2,320 square feet. That is 4.9% lesser than the middle size of new homes three years sooner, at 2,440 square feet.
Also, he said that home developers were centered around that $500,000-and-up market because the edges were more advantageous, but they’re beginning to discover now that there’s such a significant amount of repressed interest in the lower-end-valued market that they can economically offer networks and new development, and we’ve seen a ton of progress in that space.
Year-over-year average costs for new homes started decelerating in spring 2018. At $309,700, the average price of another home in October was 3.1% lower than the middle new-home value a year sooner. In any case, Fannie Mae and NAR foresee that new-home costs will ascend in 2019.
First-time Home Buyers Will Increase
The real estate and mortgage industries are centered around serving first-time home purchasers, and in light of current circumstances: first-time home buyers have overwhelmed the mortgage industry for as far back as ten years. And they are still increasing today as per an Urban Institute report distributed this mid-year, which includes, we won’t see this changing at any point in the near future.
Prior to the housing disaster, first-time home purchasers took out about 40 percent of procurement contracts, as per the establishment. Recently the novice share has been about 60 percent.
Tian Liu, financial analyst for Genworth Mortgage Insurance, says 80 percent of the development in home deals in the previous three years has originated from first-time purchasers. Do you want to know why? First-time home buyers represent years of repressed demand.
Home Sellers Could Struggle
As referenced previously, 2019 will remain a merchant’s market, where home buyers exceed supply. However, that doesn’t mean home dealers can anticipate offering wars from urgent purchasers.
That is particularly the situation with individuals who are moving homes that cost over the area’s median, Realtor.com financial expert Hale says. First-time purchasers command most markets, and they will, in general, shop for homes estimated underneath their area’s median. As a merchant, Hale says, in case you’re in that above-middle value point, you will need to value aggressively and offer motivating forces for purchasers.
So, 2018 was such a tease in the real estate industry. Will 2019 deliver more of the same outcomes? What are the trends that you should look out for this year? Whether you are staying put, buying, or selling, the above trends are the mortgage trends that you need to know. Keep your eyes and ears open for the upcoming trends by staying up to date with various mortgage groups such as Annapolis Mortgage Group.