Real Estate Predictions for 2019
The early predictions for 2018 in the real estate market were that the market was expected to stay booming, even with interest rates steadily rising and housing inventory not great in many areas. First time home buyers were flocking to their real estate agents, securing their hard money loan financing and continuing in bidding wars up until the later months when the market seemed to take an unexpected slowdown.
The market in 2019 will look very much the same, with a few changes. See below for what experts are predicting for the upcoming year in the housing market.
Interest rates will continue to increase. Even with rates rising over the past few years, they’ve continued to stay below the recession rates, and have been fairly reasonable considering the economy’s growth. However, interest rates could increase to as much as 5.8% for the typical 30-year fixed rate mortgage, which is as high as we saw during the great recession in the early 2000s. Now is the time to look into other financing options such as a hard money lender to be able to save money in the long run. The interest rate may be slightly higher with a direct lender, but the loan is a shorter time frame, meaning you will pay it off before too much interest has accumulated.
Millennials will still rule the buyer’s market. Despite them being the youngest generation of homebuyers, many of the millennials are now entering into their late 20s and early 30s, have established careers and may even be moving on to their second homes. They make up nearly half of the buying population now and will continue to be the purchasers in 2019.
Budgets will drop. As most people are calculating their buying budget with an affordable monthly payment, as rates increase, the budget for homes will decrease. Factoring in everything from down payments to private mortgage insurance, interest rates and property taxes, the overall budget for homebuyers will be declining as interest rates start eating up more of their monthly payments.
However, inventory will increase. The good news for homebuyers is that while they may not be able to afford the housing they could in the former few years, the inventory of housing within their price ranges is expected to increase slightly. With more houses on the market, this could mean an end to bidding wars and the need to act quickly in some areas, but not all.
Commercial investors will benefit. Those that look into buying and renovating apartment buildings will benefit this year, as the national renting average is expected to increase. Apartment building loans are made for just this purpose, so if you are thinking of investing in 2019, that’s a great place to start. Direct lenders can help you secure financing for purchasing and renovating fast, so you can have the apartments available for rent as soon as possible.