Arthur J. Villasanta – Fourth Estate Contributor
Santa Clara, CA, United States (4E) – Average home prices across the United States will be 8% more expensive per month in 2019 compared to 2018, according to a new forecast from Realtor.com.
Mortgage rates are also expected to rise, and might hit 5.5% by the end of 2019. They’ll average 5.3% in 2019 and reach 5.5% by the end of that year. The National Association of Realtors expects the 30-year fixed rate mortgage to reach 5.5% in 2020.
The news for home buyers gets worse. A separate housing survey from Fannie Mae estimates only one in five Americans think it’s a good time to buy a home. Experts said one factor contributing to the weaker housing market is the recent increase in mortgage rates, which is bad news, especially for millennials.
These increases could force buyers to downsize the type of home they’re looking for and may knock some would-be buyers out of the market entirely.
“We don’t expect a buyer’s market on the horizon within the next five years,” said Danielle Hale, chief economist for realtor.com.
Among the 100 largest markets, only seven are forecast to see home prices drop.
Some of the key findings from Realtor.com’s 2019 housing forecast:
* Home price growth will continue to slow, with a forecasted increase of 2.2%
* Inventory increases will remain moderate with less than a 7% increase
* High-priced markets will buck the trend, with double-digit inventory gains
* Millennials will account for 45% of mortgages in 2019 vs. 17% for Baby Boomers
* The new tax plan will be good for renters, mixed for homeowners
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