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Churchill Mortgage By Churchill Mortgage • January 31, 2019

2019 Home Buying Trends

Whether you’re looking to sell or buy a home this year, it’s important to look at your local real estate market in addition to national trends since predictions can vary from area to area.

At the end of the day, no one really knows how things will work out with home prices, interest rates, and inventory but here’s what we’re keeping our eyes on in the housing market as 2019 progresses:

1. Low Inventory Relief

The low housing inventory has been a pain point for many home buyers across the U.S. over the past few years. In fact, the supply of houses hit an all-time low in 2017 and still hasn’t bounced back. Because of this, home prices increased and many home buyers were caught in bidding wars.

  • 2019 should bring some relief with inventory expecting to rise between 10-15%. Keep in mind this increase looks to be in the mid-to-high end of the housing market (i.e. houses priced at $250,000 or more).* There’s still a lot of work to be done to relieve the stress of finding a home for first-time home buyers—inventory for this market is expected to remain tight nationally throughout the year.
  • For those looking at building a new home—construction has been slowly rising but houses are not being built fast enough to keep up with demand. New home construction is expected to increase by 8% in 2019 but will more than likely come at a higher cost due to construction companies trying to keep up with the manpower needed for this boost in building.**
  • We may also see a rise in homeowners staying put and making home improvements to their current home by cashing out equity to expand or update their home and avoid a move.
2. Home Prices

In short, home prices are expected to rise on a national basis in 2019 but at a slower pace than in years past. This may bring some relief to home buyers, especially as employment numbers remain strong and there’s a healthy wage growth as well.***

  • The national median existing home price is expected to rise between 2% and 3% in 2019. Affordability for first-time home buyers will remain a concern throughout the year due to the lack of starter homes but those looking to upsize will have more options.
  • If you’re looking to buy a home, it’s essential to find out how much you can really afford. It’s easy to crunch the numbers with our handy mortgage calculator so you can figure out a monthly payment you feel good about. Any way you slice it, it’s important to have a plan and a budget and stick with it.
3. Interest Rates

Low interest rates have been the norm for the past 10 years so it can be alarming to see rates rise. We completely understand that fluctuating interest rates are always a hot topic for potential home buyers! As we all know, interest rates are unpredictable and can be difficult to pin down. Many industry analysts expect the average rate for a 30-year fixed rate mortgage will hit 5.0% in 2019** which is still historically low, even though this is a new reality that can be stressful for first-time home buyers.

  • The Federal Reserve has been widely expected to raise rates in 2019 but have decided to take a more patient approach and put rate increases on hold until they can get a clearer picture of what the future economy holds after the recent government shutdown. At this point, we're expecting rates to increase 0-2 times in 2019 (down from the 4 hikes in 2018) which will ultimately impact long-term rates such as mortgages, corporate bonds, and 10-year Treasury notes.
  • Protect yourself from the rise and fall of rates by becoming Rate Secured. You’ll be able to secure a low interest rate at no additional cost, lock your rate for up to 90 days while you shop for a home, and have the option to reset the rate for another 90 days if you don’t find a home in the initial 90-day period. No need to try and predict the market with this great program securing your mortgage savings.
What All of This Means

Take note of what’s going on in the housing market on a national level, but more importantly watch home prices in your local area to see if prices are moving higher or lower depending on demand or inventory levels.

If you’re looking for a home in the next 90 days, it’s smart to become a Churchill Certified Home Buyer and get Rate Secured so you stand out from your competition. This allows you to look for the right home without worrying about interest rates or your monthly payment rising.

Remember to keep in contact with a Churchill Home Loan Specialist in your area so you can stay informed with interest rate movements and be your guide to help walk you through the mortgage process.

Sources:* https://www.usatoday.com/story/money/2018/12/21/housing-market-predictions-2019/2218094002/** https://www.realtor.com/research/2019-national-housing-forecast/*** https://finance.yahoo.com/news/slowing-u-housing-market-small-151034842.html