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2019 Real Estate Forecast: What Buyers and Sellers Can Expect from Mortgage Rates

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By Laura Bryum

In the past several years, the housing market has been up and down – and 2018 was no exception. What started with mile-high home prices and low mortgage rates for sellers has now moved to a more even playing field, where the growth in home prices has stalled. This means that the advantage has shifted slightly from sellers to buyers.

What can you expect in 2019? Let’s look at the coming year in real estate.

2019 Real Estate Forecast

  1. Mortgage Rates Will Continue to Rise

The short answer is that your mortgage borrowing costs will go up. Even though rates have been on the rise for the last two years, they have still been lower than before the recession in 2008 and 2009. This is likely to change in 2019, with national organizations predicting the 30-year fixed rate mortgage could reach as high as 5.8%, although most think it will hover around 5.1%.

Because of the number of people choosing to wait to purchase a home combined with growing interest rates, rents will likely increase as well.

  1. Buyers Will Have Less Competition From Other Buyers

 While there is still a strong demand in the market, buyers in 2019 will likely appreciate having less competition and fewer bidding wars – a welcome relief from factors that have become routine with the historic low interest rates and shortage of affordable housing options. This also comes with the reality of considering mortgage rates and rising home prices, which they will have to balance against their personal finances.

The Federal reserve hasn’t yet finished increasing rates, so buyers shouldn’t be complacent when deciding to purchase. Industry experts agree that purchasing a home now instead of waiting six months from now will likely result in a lower monthly payment. In addition, post-purchase, early buyers will likely experience a small appreciation in home as a result of the expected modest rise in home prices.

  1. Homes Priced Appropriately Will Sell

That’s good news for sellers, who are no doubt concerned about the rising rates and the fewer number of buyers who will be bidding on their properties.

There are a few silver linings with regards to the market overall and the ability to purchase a home. Government-sponsored enterprises Freddie Mac and Fannie Mae have eased their criteria for qualifying for a mortgage. Slightly higher debt-to-income ratios and higher loan-to-value rations may make it easier for borrowers to qualify for a mortgage with less money down and a higher level of debt.

Click here for more details on the 2019 mortgage rate forecast from leading housing authorities.

How to Prepare, Despite the Market

 No matter what happens with in this less-than-ideal market, the decision to purchase a home is a personal one. To prepare for these changes in market conditions, be sure your finances are in order – meaning start aggressively saving for a down payment sooner rather than later, keep a close eye on your credit (or work to improve it by paying down your debt), and carefully consider your budget when shopping for a new home.

For more information, contact Tonya Golden with First Bank Mortgage. Located in the Keller Williams office off Main Street or call, 205-767-4293.

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