Home prices are predicted to go up significantly in 2019.
And, the year could be the most opportune time for homeowners like you to put their homes on the market. If you are not very sure about selling your house in the next two years, first listen to what the experts have to say.
For instance, Nick Ron, House Buyers of America’s CEO says 2019 would be better compared to 2020 and 2021 – how the house market would perform during the latter years is not certain.
Housing Market 2019 Expectations
The latter half of 2018 saw house prices’ growth slowing down, with lesser number of potential buyers coming into the foray, thanks to rising Federal Reserve-issued interest rates. 2019 may not necessarily usher in a flurry of home buyers, but it should be much better than what the latter half of 2018 was.
If you purchased a house within the last couple of years and are liking your abode, you are advised to keep liking your house for the next five years at least. But if the thought of selling your house is currently on your mind even in the slightest, you’re advised not to wait any further.
The following reasons why you must sell your home in 2019 shall give you some perspective:
1. The market is seeing an influx of new buyers
As interest rates go up, buyers may think twice to buy a house or go for a mortgage. And if your property commands a more premium price than average listings, buyer interest in your house should be even lesser. The mix of increasing mortgage rates and house prices exceeding budgets of average buyers are the reasons why home buyer activity has slowed down in the last few months.
However, with accessible housing inventory staying low, buyers ready to buy a house will still be shopping for homes. Millennials or first-time buyers would constitute the fresh set of home buyers to a large extent. Trulia, a real estate data firm commissioned Harris Poll to survey 2,000 American adults. In the survey, more than a fifth of U.S. citizens falling within the 18-34 age group said they were planning to purchase a house within a year. Millennials are already making up the biggest share of property buyers at 36 percent, as per the National Association of Realtors that came up with the figures in March 2018.
The bottom line: Though houses could be available for sale for some more days when compared to 2017, the year when the real estate market was buzzing with activity, buyers would stay active, and selling your house for a significant profit is still possible.
2. Interest rates haven’t touched maximum heights yet
Mortgage interest rates are going through a bumpy phase in the past few months. As per Freddie Mac, the rates of interest for a fixed-rate, 30-year mortgage have touched their highest levels in more than seven years by the end of 2018 when the 4.98 percent mark was touched. By February 2019 end, however, interest rates have gone down marginally to 4.35 percent, as per the mortgage loan firm. While expecting mortgage rates to go up slowly throughout the subsequent year is nothing strange, they would stay a lot lower compared to the 18 percent historic high witnessed in 1981.
Though mortgage rates usually walk the path the interest rate activity of the Federal Reserve takes, mortgage interest rates are usually based on the current market circumstances, the property you are eyeing for purchase, and your financial status.
3. Your equity is high
People who bought houses in the recession period or right after the crisis benefited from significantly lesser interest rates and decreased home prices up until 2015, a period during which houses were in recovery mode still. If you are one of those buyers, your house equity should have gone up with almost every mortgage payment and every renovation you did to your property.
The higher your house’s equity, the more you make from its sale, which could easily be used as down payment for the next house you buy. The bigger your initial payment on a house, the more attractive you’ll come across to lenders and lesser your interest rates would be, and you would most likely not have to increase your monthly private mortgage insurance payments.
4. Sell now and do not wait for 2020 to arrive
If you are contemplating selling your house in 2020, better do that in 2019 itself. In a survey carried out by Zillow, a real estate data company, in May 2019 on economists and real estate experts, 50 percent of the panellists claimed to foresee the next recession happening in 2020. Fourteen percent of them believe the recession phase would extend until 2021; 24 percent of the respondents think recession would happen much earlier – in 2019 itself.
Irrespective of what your thoughts about the impending recession is, existing real estate patterns denote that a sharp increase in prices or activity is not very likely in the foreseeable future. Property markets function on their own cycle, the duration of which could vary between markets but will be between a decade or two in total and move from being a market for sellers to a market of buyers with a balance period between the two.
Ron says a big upsurge in real estate prices or increased demand is highly unlikely in the next few years.