What you need to know
The majority of homeowners still haven’t forgotten the 2008 housing market crash. In fact, there are still some adversely affected by it. While bubbles, crashes, and regrowth are the norm, people still often wonder, is there a coming shift in the housing market? And they want to know when it will be so they can stay one step ahead.
The bottom line is, it’s a complex question, and no one can ever truly foretell what’s to come. However, there are many experts that have gotten savvy in predicting the future for the real estate market, mortgage banking, and the overall housing industry.
What’s the current housing market like?
Depending on where you live, the housing market is going to vary slightly. In places like Seattle, there has been a huge increase in value that is finally starting to slow. This happened directly due to a lack of inventory and a robust job market, and then, once the prices reached an all-time high, a hesitation to risk a bubble.
In general though, the housing market has been good throughout the nation. The job market is strong, interest rates decent, and mortgage lenders aren’t making the same choices they made in the early 2000s. Overall, the current housing market has seen nice growth around the country.
What are experts predicting for the 2019 housing market?
There are a few predictions being made for 2019. They are:
Higher interest rates – 2018 brought three rate hikes. While this isn’t atypical for a good economy, it has buyers hesitating. The effect of higher rates is clearly seen in the mortgage banking industry. Those dollars swiftly add up for those searching for a home, and has potential buyers looking more closely at numbers.
The rise in home prices will slow as a result of higher interest rates – With buyers stepping back, the rise in home prices slows. It weakens the market, especially when you lose the buyers who can afford the prices, but don’t want to take a risk.
Good markets will continue to grow (more slowly), while others will slow or flat line – Less inventory means slower markets overall. Sellers will likely choose to grow equity rather than selling, especially if they're hesitant to try and find a new house in the slowing market.
Homeowners will look at alternatives – Gone are the days you when you have to sell. People are taking advantage of renting, renovating, or adding rental units on-property. They may also choose to sell directly through new online platforms.
Potential homebuyers may choose to rent – The rental market may see an upswing as potential homebuyers forgo the housing market.
How can you stay safe no matter what the housing market is like?
Mortgage banking professionals will tell you that investing in a home can be safe at any time when approached properly. Some ways to safeguard include:
- Find a house that fits your needs and is a good value (avoid inflated prices)
- Look in areas that continue to see healthy growth
- Put at least 20% down
- Purchase a home that grows with you and fits your evolving needs and is in a location that supports your lifestyle
- Shop around for the best rate
- Keep your home in good repair with annual maintenance and appropriate upgrades
- Make sure you have job security
- Consider your buy-rent ratio
Although it’s impossible to know what’s coming in the housing market, you can make thoughtful choices that safeguard you whether the current state is weak or strong.
Equal Housing Lender