All in all, 2019 has been good for real estate buyers so far. Home prices stopped soaring, and mortgage rates dipped. Although there is less competition for buyers, CoreLogic told Forbes the market remains a sellers? market. Despite this slant, buyers can still enter the market. Here are the experts’ predictions for the housing market in the second half of 2019.
According to Forbes, last year, over 50% of all Fannie Mae and Freddie Mac mortgages were first-time buyers.? Millennials are now at the ideal age for buying their first home.?
The National Association of Realtors reported millennials represented 37% of all homebuyers last year. Since 2017, millennials accounted for 20% of all sellers. They are also the country’s largest mortgage originators, holding 45% of 2018 mortgage originations.?
Inventory is rising for starter homes and trade-up properties. However, it?s not likely to fulfill demand. Starter home inventory was up 3.5% last quarter, with a rise in trade-up options of 4.8%. However, this came with a 12.4% and 8.3% increase in price, respectively.
Forbes also reported that there have been inventory increases, but they remain low according to LendingTree?s chief economist Tendayi Kapfidze. That is especially true of homes available at lower prices?
Odeta Kushi, deputy chief economist for First American, told Forbes that total housing stock is quite a bit lower than the nation?s pre-recession average. Higher markets are the most likely to benefit from any upward trend in starter-home inventory, especially in areas like the West Coast?s San Jose and Seattle areas.
Although the increase in prices has slowed, it hasn?t reversed. This is helping make homes more affordable when you consider that there has been an acceleration in wage growth. Caution is required as prices are still on the rise, but where homebuyers can win is with the lower mortgage rates. It?s the low inventory that will keep prices rising according to Kushi, and CoreLogic predicts a 5.6% increase by May 2020.
Mortgage rates are the lowest since late 2016. The average, according to Freddie Mac, is 3.6%. This led to a surge of refinancing in late June. In fact, more than half the mortgages just before July of this year were refinances.
There?s a chance that mortgage rates might drop even more. Doug Duncan, chief economist at Fannie Mae, told Forbes that he feels they could decrease “if the Fed acts to lower rates as insurance for economic growth.??
Forbes reports that mortgage experts, including Fannie Mae, Freddie Mac, and the Mortgage Bankers Association, are predicting a 3.9% to 4.1% 30-year, fixed-rate mortgage rate by the end of the year. Last year?s full-year average was 4.54%.
Buyers don?t need to rush to get into the market as prices are moderated and mortgage rates aren?t expected to rise significantly. The prices will vary by market, so first-time buyers should speak to our experts to see how their area is performing. We can let you know how supply and demand are looking to help determine affordability.?
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