The State of the U.S. Real Estate Market for 2019
As we head into a brand new year, with new regulations, market predictions, and politics, many real estate investors and developers are all asking the same question: is now the time to buy? Although less volatile than the stock market, the real estate market is a lucrative and highly popular place to invest with hopes of a valuable return.
Considering 2018 saw its ups and downs, starting with sky-high home prices at the beginning, historically low mortgage rates, and now a recent shift from favoring the seller to the buyer, will these trends continue through 2019?
Let’s find out.
Mortgage Rates Are Still Going Up
As reported by Forbes, as the 30-year, fixed rate mortgage will reach 5.8% this year, this is territory that has not been achieved since before the housing collapse of 2008. It’s a good sign for a healthy market, but it’s also pushing out a lot of buyers unable to shoulder such a mortgage cost given the standard of living.
Millennials Are Doing Their Best
Despite these rising mortgage rates, millennials are now at home-buying ages, which is making it hard for them to afford that down payment. Millennials make up the largest segment of buyers this year, setting the stage for 2020 in which millennials will make up the majority of every market looking to buy a home.
Shift from a Seller’s Market to a Buyer’s Market
For the past 5-years, we have seen an incredible seller’s market across the country, something that has dominated news headlines. However, as we head into 2019, it is expected that home sales will decline by 2%, as experts predict it to be a slightly slower year while buyers deal with higher mortgage rates. As the sales slow, sellers will be left with less leverage than in years prior.
With mortgage rates rising and more new construction homes and developments opening to the public this year, the bidding wars of the past will come to a halt. With sellers receiving 15 bids on a listed home in just one-week in 2016, now, the picture is shifting slightly with more inventory available to buyers. It’s another key component in the shift to a buyer’s market.
Rents & Construction On the Rise
Lastly, rents are expected to rise, as they do every year, but with the abundance of construction finally completing, these rental hikes will be eased by the availability of units at renters’ disposal.
So, is now a good time to invest in real estate? Given the reliability and performance of a real estate investment, it’s always a good time to buy property or a plot of land. With each individual market holding its own value, consider waiting a little longer for the buyer’s market shift that will put you in the driver’s seat.