Realtor.com Expects Tough 2019 for First-Time Homebuyers

As 2019 approaches, it seems that the new year will bring tougher times for both homebuyers and sellers. That prognostication comes from Realtor.com, which just released its 2019 Housing Forecast. With mortgage rates and home prices expected to continue rising, those looking to buy or sell a home in the next several months may encounter more difficulties — especially younger, first-time buyers.

According to Realtor’s estimates, mortgage rates will reach 5.5% by the end of 2019. In turn, monthly mortgage rates are anticipated to climb 8%. Because of this, would-be homeowners with smaller budgets may find themselves priced out of the market. This is notable as Millennials are expected to account to 45% of all home mortgages in 2019 compared to just 17% for Baby Boomers.

On the other hand, home price growth is expected to slow to 2.2% for the new year. Additionally, as some buyers drop out due to rising rates, those remaining will find a less competitive market. As a result, sellers may have to settle for closings below asking price as the likelihood of bidding wars will decrease in many markets.

Despite this Realtor’s Danielle Hale explains that 2019 will continue to be a seller’s market. She notes, “Inventory will continue to increase next year, but unless there is a major shift in the economic trajectory, we don’t expect a buyer’s market on the horizon within the next five years.” To Hale’s point, overall house inventories are looking to increase 7% with upscale inventories increasing at a much faster rate. Meanwhile Hale says, “Unfortunately for buyers, it’s only going to get more costly to buy, especially the most-demanded entry level real estate. To be successful, buyers should think through how they’ll adapt to higher rates and prices.”

Among the markets where the most inventory growth is expected are San Jose, CaliforniaSeattle/Tacoma, Washington.Worcester, MassachusettsBoston, Massachusetts; and Nashville, Tennessee. Each of these metros is likely to see double-digit gains in home inventory in 2019. One interesting note that Realtor tacked on to their report is that it was compiled prior to Amazon’s announcement that they’d be splitting their “HQ2” between Queens, New York and Arlington, Virginia. Considering that each of these facilities will bring 25,000 jobs to their respective areas, the housing markets in each location will almost certainly be affected in the new year.

If Realtor’s forecasts are correct, it seems that 2019 will be an interesting year for the housing market. While it may not be a buyer’s market yet, sellers aren’t exactly sitting pretty either — at least not those looking to offload their starter homes. On top of all this, there could also be some possible effects to be felt as taxpayers file under new standard deduction rules for the first time. In other words, whether you plan on buying or selling a home in the new year, don’t expect everything to go as planned and prepare yourself by having a plan B.

Still don’t consider it as sellers year next year because only a few could afford to buy a house if the prices will soar.

Maybe its time to reconsider buying a house next year but who knows maybeby the end of the year prices may get better.

Comments are closed.

Author

Jonathan Dyer

I'm a small town guy living in Los Angeles looking to make solid financial decisions. I write for a number of finance websites, including HuffingtonPost and Business2Community. I founded DyerNews.com in 2015 to focus on personal finance and the emerging FinTech markets.

Other Articles by Jonathan Dyer

Bilt Extends Rent Day Promotion for Black Friday and Beyond

In October, the unique Bilt Mastercard unveiled its inaugural Rent Day promotion, which included the opportunity for cardholders to earn double rewards and nearly all of their purchases on the first of the month. That deal returned in November alongside the addition of a United Airlines status match offer and more. Now, just in time for Black Friday, Small Business Saturday, and Cyber Monday, Bilt is extended December's Rent Day...

Venmo App Adds Charitable Giving Interface

Although Thanksgiving and retail holidays such as Black Friday, Small Business Saturday, and Cyber Monday may be on the minds of many people, a popular peer-to-peer payment app is looking ahead to Giving Tuesday. This week, Venmo announced the rollout of a new interface that will make it easier for users to discover and donate to various charities. The feature is now live in the latest version of the Venmo...

American Express Introduces New Credit Card Approval Process

For some consumers, applying for a new credit card can be anxiety-inducing as there's a chance that they could not only be declined for the product but also have their credit impacted by the credit inquiry. To give these applicants better peace of mind, American Express is rolling out a new approval process. Amex has announced a new pilot program for its U.S. Personal Cards (meaning non-business cards) that will allow...