2019 – Top Trends in Housing and Lending Market

What to expect in 2019 in terms of trends in housing and lending market? There are several trends that specialists see in these interconnected markets. Let’s decipher them together:

1. Home prices

Home prices will continue to grow but not as steep as in the last few years.  Some of the market gurus think that in 2019 the market will go flat. No matter which prediction will prove to be true, this means 2019 is the perfect moment for a home acquisition.

2. Top US markets - trends in housing

All specialists agree that the top US housing markets, in terms of largest sales and prices gains, will be: Las Vegas-Henderson-Paradise, Nevada together with Dallas-Fort Worth-Arlington, Texas; Deltona-Daytona Beach-Ormond Beach and Lakeland-Winter Haven Florida; Stockton-Lodi, California; Salt Lake City, Utah; Charlotte-Concord-Gastonia, North and South Carolina, Colorado Springs, Colorado, Nashville-Davidson–Murfreesboro–Franklin, Tennessee and Tulsa, Okla.

3. Increased home inventory for sale - trends in housing

The home market was confronted, in the last years, with an acute shortage of affordable houses, especially for first-time buyers. Among the reasons for this shortage we can mention:

• Investors prefer to build high-end houses that provide a higher margin when sold
• Investors that bought homes when the housing bubble burst and prices plunged receive hefty revenues from leasing so they are not inclined to sell.
• Baby boomers are living longer and not downsizing as former generations had done when aging.
• Seller's hold out for higher prices

This trend started in August 2017 when the U.S. housing market witnessed a higher than normal month-over-month increase in the number of homes on the market.  According to Redfin, "in November, the number of homes for sale increased 4.9% year-over-year, reaching the highest level of inventory growth since June 2015." Boston, Detroit, Kansas City, Nashville, and Philadelphia are considered the areas where the home inventory will recover first. The growth will happen first in the mid-to-upper tier price and only later in the starter homes tier.  

1. 4.    Increase Mortgage Rates

Specialists considered that mortgage rates will reach 5.0 percent at year-end 2018 due to the steady economic growth, and the inflationary pressure. This is not good news for home buyers. However, the federal reserve will try and depress any more immediate increases to avoid an economic recession.  Please remember that at the beginning of 2017 most specialists also expected mortgage rates to increase and after mid-March 2017 when the rates spiked at 4.58% they decreased even below 4% during the summer.  

5. Increased credit availability 

Thanks to FHA (Federal Housing Administration) it is now possible to get a mortgage loan with 3.5% percent down payment. Also generally lenders have loosened up the qualification criteria so, once again is a good moment to purchase a house.  For example, we now have a 10% down FHA program that will allow a credit score all the way down to 550.  Granted you will pay a higher rate if you qualify, however, it's possible!  

6. Millennials will perform most of the home acquisitions 

  Buyers 36 years old and younger will still be the largest generational group of home buyers. This major contemporary workforce has, as an average, a substantial buying power and a good credit history. These younger borrowers show an increase in interest in rehabbing urban properties.  This is more enticing to them than purchasing in suburban or exurban areas as other generations preferred. These trends can be true in Las Vegas area as well.

7. Tax reform influences affecting trends in housing

Loss of tax benefits for ownership could decrease the number of sales and force prices down. The impact will be more substantial on markets with higher incomes and prices. Other taxpayers, including renters, might see a tax cut, and as a result to get more disposable income. The true influence of the tax reform on the housing market will become clearer as we progress in 201 while taxes for 2018 are filed.

In Closing

If 2019 is the best time to make the most important purchase of your life contact Casey Moseman. 702-271-1274.  She can get you the best mortgage loan possible. She can also inform you about down payment assistance programs for teachers.