You cannot deny the fact that in the year 2018, the housing market has seen many fluctuations. The year started with shooting home prices, low mortgage rates and an ultimate upper hand for sellers. In the closing months, the mortgage rates have soared to the zenith point. This has resulted in a great advantage for individuals who are thinking of home ownership. Will these trends continue to grow?
Mentioned below are a few things that experts working in home finance and real estate assume will happen in 2019.
Millennials will be the biggest generation group of home buyers
The housing market in 2019 will experience a rise in mortgage rates resulting in the rise of millennial home buyers. According to findings conducted by the mortgage experts, they will be accounting for nearly 45% to 50% of mortgages. Some of them are even taking a leap, that is, they are moving on up from their starter homes.
Home buying power will go down
You will find that most of the home buyers opt for a monthly payment plan. Rates that are on an increasing fixed monthly payment results in less borrowing ability, so the buying capacity will be nearly 10% lesser than the previous year. The suitable market response is a slowdown in sales because of fewer buyers, according to the chief economist for LendingTree Tendayi Kapfidze.
As we proceed in the year 2019, we are expecting home sales to take a downward fall of about 2%. According to Ruben Gonzalez, chief economist at Keller Williams, expects this year to be a slower year for home buyers because of the rise in rates.
Tax worry will stay
The initial few months of 2019 will show how the new tax changes affect homeowners. However, the bigger challenge is how the $10,000 limit on state and local tax deductions will influence housing markets in high-tax states such as California. Home buyers may be reluctant to purchase homes in high-tax states if they are more likely to pay large sums in non-deductible taxes consequently resulting in the purchase of smaller homes.
The bottom lines
If you are a home buyer, make sure you are quick to decide when shopping for rates. Rates change often and quick so when the right rate comes along call a loan officer right away to lock in your rates. You can invest quality time finding a house that fits your budget. It is always recommended that you speak to an experienced loan officer to help you understand the real estate market, it is especially critical in the home buying segment. Loan officers will use their experience and knowledge to help you find options that meet your lifestyle, budget, and choice.
At Prospect Financial Group, we can provide you home buying solutions based on your needs and budget. Our mortgage experts will help you in making the best decision for your scenario.
Prospect Financial Group
948 Garnet Avenue
San Diego, CA 92109
NMLS: 349089 | BRE: 01837707
Jason Vondrak has been in the mortgage industry since 2004 and co-founded the mortgage brokerage Prospect Financial Group in 2006 in San Diego, California. Today he serves as President and CEO of Prospect Financial Group and the president and founder of Prospect Property Group, a real estate development company, established in 2012.
“I’ve had the privilege to serve in an industry that exists to ensure homeownership remains among the top priorities of government and citizens alike. Over the years, it has been a pleasure working alongside homeowners, real estate professionals, and business associates combining efforts and teaming up to help homeowners realize the dream of home ownership.”