Homeowners and non-homeowners alike are always fascinated with what’s happening in the real estate market. I find myself discussing what’s going on in the market with complete strangers while in line at the grocery store. It’s amazing! With a low inventory of available homes to buy, 2018 threw first time home buyers in a tizzy with competing offers and missing out on homes even with an over-asking price offer. Is this now the new norm for buying a home or can we expect to see a more “balanced” market in 2019?
In their forecasts for 2019, the National Association of Realtors expects home sales to flatten and home prices to continue to increase, although at a slower pace than 2018. NAR expects the median home sale price to rise 3.1 percent to around $266,800 in 2019. Overall, home values are expected to see a 2.2% increase in value over 2018. So, what does this mean? While inventory on available homes for sale are likely to remain equal to that of 2018, we are not likely to see the double digit appreciation like years past. Home values are seemingly increasing at a normal appreciation rate which means buyers are less likely to overpay for a property they would like to purchase.
Mortgage rates are expected to see an increase in 2019 as well. Realtor.com has mortgage rates averaging 5.3 percent in early 2019 and should reach 5.5 percent by the end of 2019. With anticipated increases in mortgage rates, this will leave potential buyers wondering how this will affect their buying power. Take a look at the chart below.
Overall, the housing market is continuing strong coming into 2019. With projected increases in 2019, it may be advantage to the buyer to buy sooner in 2019 than later. Questions on this information? Contact me at AliciaFisher@bhhsmi.com.
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