The start of a new year always brings changes — new diets, new jobs, new homes. We're here to help navigate through the ups and downs of buying and selling your Silicon Beach home in 2019. From more millennial buyers to higher interest rates, below are our market predictions for the new year!
Rising Interest Rates
The biggest question that we have seen so far in 2019 has been regarding the rising interest rate. Mortgage rates are at their highest since 2011, but this isn't a bad thing! The rising interest rate is simply a reflection of a good economy, proving it’s a great time to buy or sell your home.
Millennials Will Continue Buying Homes
While interest rates are rising, housing prices are expected to stabilize, offering additional affordable options to first-time homebuyers. With each passing year, Millennials are also getting older and closer to wanting the stability of homeownership. Additionally, mortgage lenders are experimenting with new ways to check creditworthiness and streamline the application process — making easier for tech savvy millennials to get pre-approved for mortgages.
We’ll Start to See More Inventory
The initial wave of first-time home buyers will cause a demand for higher inventory levels than in 2018. This doesn’t mean the days of bidding wars are over, but it does mean that there will be a need for more inventory, with the prediction that housing inventory will follow. Additionally, with the economy steadily growing new construction inventory is growing as well.
Expect To See Some Life in the Housing Market
“If mortgage rates trend sideways next year, as we anticipate, and home price appreciation continues to moderate, improving affordability should breathe some life into the housing market,” said Doug G. Duncan, chief economist at Fannie Mae.
Buyers Will Have Smaller Budgets
A slightly higher interest rate doesn’t necessarily add a significant amount to the total you pay back to a lender for your mortgage, but it does increase your monthly payments. You could see anywhere from a change of $50 to “a couple hundred dollar increase, and that can make a huge bit of a difference,” says Jim Murrett, president of the Appraisal Institute. Because of this monthly increase, buyers are purchasing less expensive homes — keeping the monthly costs within budget.