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Written by: Laurie Taylor
How will the real estate market or mortgage industry acknowledge a year of uncertainty in 2019? We all know for a fact that the past year has been one of turns and twists for the mortgage industry. As with every new year, the real estate market can change in an instant.
As such, all of us, especially those who are new to the business, need to keep their ears and eyes open for the emerging trend to hit the real estate market and might create a stir. Knowing what to expect in the mortgage industry will not only put you ahead of the game but can aid you in serving your customers much better. Thus, you will be more than ready to inform, react, and implement the uncertainty of the year, both bad or good.
There is no doubt that the past year’s real estate market or mortgage industry has seen lots of ups and downs. Will the housing market trends of 2018 continue in 2019? Well, here is what we can expect to happen in the real estate market in 2019.
Increasing Mortgage Rates
In spite of the steady growth of the real estate market for the past years, mortgage rates were much lower than they were throughout most of the market slump and below average for the kind of robust economic progress that we have been experiencing. However, in 2019, that will likely change.
According to Aaron Terrazas , Zillow’s director of economic research, as the thirty-year, fixed-rate mortgage rises to 5.8 percent - housing market not observed since 2008 when mortgage rates were dramatically decreasing because of the housing crisis.
More and More Millennials Will Buy Homes
The real estate market or mortgage industry in 2019 will be defined or distinguished by ongoing increasing mortgage rates and escalating millennial demand. Surging mortgage rates, which makes houses and apartments more expensive, will likely discourage and dissuade potential property buyers from the market.
On the one hand, most millennials will likely be turning 30 in 2019, penetrating home-buying age and peak household formation, and imparting to the growth in first-time property buyer demand.
According to the chief economist for Realtor.com , Danielle Hale, millennials will continue to contribute to the wide-reaching cohort of buyers in 2019, amounting for 45 percent of mortgages, compared to 37 percent of Generation Xers, and 17 percent of Boomers. Although first-time home buyers will have a hard time in 2019, older millennial home buyers will, for the most part, have more choices in the middle-tier to upper-tier cost and will likely comprise most millennials who buys a home in 2019.
Moving forward, in 2020, it is predicted that millennials who are turning thirty will make up the largest group of people who are buying a home. Also, this generation will likely have the most significant share of property buyers for the next ten years because their housing demands change over time.
Related: The Future of Mortgage Lending and InvestingRelated: Start Understanding Your Mortgage in Fewer Than 10 MinutesDecreased Home Buying Power
Let’s face it. A lot of home buyers set a budget for the monthly payment. As mortgage rates increases, a fixed budget every month interprets or means less borrowing ability and decreased home buying capacity. And because there are fewer property buyers at each cost, the response of the real estate market is a steady price momentum and a slowdown in sales.
Easing Inventory Troubles
The surge of first-time property purchaser demand will be satisfied by, to some degree, higher stock dimensions than in 2018. Be that as it may, although bidding wars and the days of multiple offers might be history in a few markets where the stock is expanding, the stock will probably still stay tight broadly through 2019.
In the more significant part of the business sectors, the number of homes being put available or recently built has expanded marginally, while the pace of offers has impeded somewhat, which has helped stop the stock decay. In any case, the stock increments or abating cost expands radically for a progressively far-reaching deals gain are not estimated to occur in 2019. While the circumstance isn't deteriorating for purchasers, it's likewise not enhancing quite well in most business sectors.
Less Home Buyer Competition
Home purchasers who can remain in the market will discover less challenge as more purchasers are valued out yet feel an expanded feeling of criticalness to close before it gets significantly progressively costly. Their most significant battle in 2019 will be about accommodating needs, budget and needs versus the overwhelming challenges of 2018.
Even though the quantity of homes available to be purchased is expanding, which is an enhancement for purchasers, the more substantial part of the new stock is engaged in the mid-to-higher-end value level, not entry level.
Takeaway
With everything taken into account, the real estate market will most probably experience a slowdown in 2019, which is not really a terrible thing. The long term and medium term potential buyers for housing are great since socioeconomics will keep on supporting the demand.
With a slower value increase, inventory has a chance to get up to speed. With slower deals, inventory has a chance to standardize. A lull in 2019 makes a more profitable lodging market going ahead. But before you buy a house, be sure to get a pre-approved mortgage loan like Reverse Mortgage Rating , to ease the home buying process in the long run.
Laurie Taylor is a writer and a blogger. She loves to write about anything like business and finance, home improvement, and a few technical stuff. When not working, Laurie spends time with her family and friends.