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The 2019 Real Estate Market Saw Growth from 2018

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Despite the fact that, according to survey data released by The Mortgage Bankers Association (MBA), December 2019 home sale activity lagged in comparison to November 2019, over all 2019 saw growth when compared to 2018.

New single family home sales only increased .1 percent from November to December of 2019, but without the seasonally-rate, numbers actually came in with about 3000 less new home sales in December compared to November. Yet, average loan sized increased by close to $10,000 for December 2019. A recap of the entire year, however, shows an increase of new mortgage applications almost 40 percent higher than 2018.

According to an article published by NationalMortgageProfessional.com, Joel Kan, MBA’s associate vice president of economic and industry forecasting  is quoted, “The housing market is seeing signs of a more significant recovery in new residential construction, which is a promising sign for prospective homebuyers. Even though supply continues to lag, we expect to see another year of gradual growth in new home sales, supported by rising household formation and the healthy job market.”

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Photo Credit: Gerd Altmann

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Experts Make Predictions for the 2020 Real Estate Market

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As 2019 comes to a close, the trends of the real estate market for the past year are being reviewed an analyzed.  However, just as it is with all new beginnings, there is also much anticipation and speculation about what 2020 will bring for real estate professionals, home owners and potential homeowners.  Unfortunately, some real estate experts are not seeing much change in the low housing inventory trend in the coming year.

In an article published by Forbes, written by Aly J Yale, Yale states, “…According to the 2020 National Housing Forecast from Realtor.com, the national housing shortage will continue in the New Year, possibly reaching “a historic low level.”  Inventory growth is absent in nine out of ten markets, down from a much more optimistic two of three markets seeing growth at the beginning of 2019.

Contributing to the problem, homeowners are remaining in their homes longer, averaging 13 years.  Additionally, although home construction has seen growth, most of the new homes are “upper-tier” homes.  This leaves entry home buyers little supply in contrast to the large demand.  With homes for sale in the lowest price tier down 10 percent through 2019.

Some positive news to look forward to are the anticipation of mortgage rates remaining low and home prices remaining steady, maybe declining in some markets. 

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Is Housing Market Ready to Rebound?

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Homeowners trying to or thinking about putting their home on the market may have been a little hesitant based on the trends in the real estate market over the past year.  As real estate professionals know, and homeowners may have noticed, the real estate market took a turn last summer.  An increased number of homes hit the market, but higher prices and decreased sales, the outlook for homeowners was less than ideal.

However, homeowners may be able to breathe a sigh of relief as this slump could be coming to an end.  With mortgage rates dipping below 4 percent and a slowed housing inventory, it appears prices and home sales should begin to climb again.

According to an article published on Realtor.com, written by Clare Trapasso, “…much of the fate of the housing market relies on mortgage interest rates. If they stay low, buyers have more money to spend on homes. So prices have more room to rise.”  However, homeowners should be aware, despite a high demand for homes as younger buyers begin their families and look to settle down, current buyers, Chief Economist Danielle Hale of realtor.com®  warns “seem a little more patient. They’re more willing to wait for a good property.”

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Studies reveal positive news for home buyers in 2019

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The spring real estate market is in full swing.  Sellers have begun the process of listing their homes with the hopes of a quick sale.  Buyers search listings, schedule showings and begin to decide on a home to purchase.  So far, in 2019, it appears home buyers are making the decision on which home to purchase faster than they were last year at this time.

In fact, a study completed by Redfin, revealed that in 2019 buyers’ time to close is three days less than in 2018.  According to an article published by the MReport, “Some of the factors responsible for home buyers being able to close on their homes faster in 2019 compared to previous years included, a rise in housing supply, a slower growth rate of home prices, and a less competitive market, according to Redfin.”

The fact that the supply of homes for sale has increased and there are more buyers than sellers often means that sellers will accept the first offer they receive.  Unfortunately, some sellers just have to wait longer to receive that offer while competing against a larger number of other sellers.  The article reports that homes are spending about two days more on the market compared to 2018.

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2019: What Do Real Estate Experts Think We Should Expect?

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Just few weeks into this new year and the U.S. already seen some pretty significant events that have, for some investors and consumers, created a lack of confidence in the stability of our economy.  An ongoing government shut down, global trade issues and some stock market dips: it should be no surprise potential home buyers may to take pause before jumping into a big investment.

Yet, many experts remain relatively optimistic about how 2019 will fare as far as the real estate and mortgage markets are concerned.  In an article published by the Washington Post, journalist Kathy Orton states, “In their forecasts for 2019, real estate experts anticipate the housing market slowing down, but not stalling, with prices and mortgage rates moderating.”

Orton reports the chief economist of NAR, Lawerence Yun believes, ““The forecast for home sales will be very boring — meaning stable.”  Although home prices are predicted to rise, it will be at a slower pace than home owners have seen in recent years.

Realtor.com expects mortgage rates to reach 5.5 by the end of 2019 and overall, expects to see just 2.2 percent growth in home prices.  Zillow echoes the other experts, with an expected 5.8 percent mortgage rate and a housing price increase of just 3.79.

The Mortgage Bankers Associations believes 2019 will perform better than other experts have predicted.  MBA economists Michael Fratantoni and Joel Kan stated, “Even with the anticipated cool down in economic growth, we expect that housing demand will remain strong, mortgage rates will stabilize, wage growth will increase and home price growth will moderate, providing favorable conditions for growth in the home purchase market.”

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