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Housing & Mortgage Trends for 2019

Looking to buy or sell a home this year? While doable, 2019 could potentially be one of those years in the real estate market where it gets a little harder for both the buyers and the sellers.

Overall, the real estate market could remain in favor of sellers—called a “seller’s market ”—as compared to being on the buying end of the equation. This is a continuation of what we’ve seen for the last five-plus years .

Compared to the beginning of last year , some forecasts predict that home prices will grow more slowly , which could be good for buyers, but mortgage rates have also increased . Ultimately, this makes homes less affordable for buyers.

This information needn’t discourage you if your financial goal is to buy the house of your dreams, but it’s always a good idea to consider housing trends against the backdrop of your personal financial situation. As is the case with all years in previous memory, buying a home will take a lot of hard work and planning.

According to a report by CoreLogic on Jan 2, 2019 , home buyers mortgage payments are going up three times faster than home prices. Market volatility aside, how does one know if it’s a good time to purchase a home? Consider what is motivating you to purchase a home. And know what you can afford to buy and what this price range can get you in your preferred location(s). Educate yourself on home price trends in the area you are looking in.

Remember that although housing and real estate forecasts are great tools, they are not perfectly predictive of the future. That’s the thing about the future—no one knows exactly what will happen. No one! Aim to make well-rounded decisions with this in mind.

Here are a few mortgage and housing trends popping up in 2019.

Housing and Mortgage Rate Predictions for 2019

1. Home Prices Will Likely Increase, But Slower Than in Previous Years

If you’ve been paying attention to the housing market over the last five years , you’ve noticed one overwhelming trend: It gets more expensive to buy a home every year, especially in high-growth urban areas.

So, a bit of good news for you: The growth rate appears to be slowing down some, though it still remains in positive territory. (Prices are not decreasing; the rate of increase is simply slowing.)

The expected growth rate in home prices is 4.8% by October 2019 which is slower than previous years, but still positive.
So long as there is continued growth in the overall economy and people continue to move into cities at a rapid clip, there is likely to be no end to this housing trend in 2019.

There’s no immediate reason to believe that a major impediment to such growth is on the horizon. “Inventory will continue to increase next year, but unless there is a major shift in the economic trajectory, we don’t expect a buyer’s market on the horizon within the next five years,” said Danielle Hale, chief economist at

2. Mortgage Rates Will Likely Increase

The Fed raises interest rates when they believe that the economy is growing stronger. While they don’t have direct control over mortgage rates, adjustable mortgage rates (ARMs) would likely see the ripple effect of rising rates. Fixed mortgage rates, however, are not necessarily tied to those rising Fed rates. Though in 2018 the rate on a 30-year fixed rate mortgage fluctuated between 4% and 5%, closing the year at 4.75% .

Forecasted mortgage rates trends are mostly consistent in suggesting that we should expect to see rates on a 30-year fixed mortgage range somewhere between 5% and 5.5% in 2019. Although still “low” by historical standards, this is a change from the last decade where rates were primarily in the 4% range.

3. Inventory is Growing Slowly but Remains Low

Housing inventory measures how many homes are for sale on the market. This past year saw a decline in inventories, with inventories hitting record lows in November 2018 .

This year, inventories are likely to increase slightly from historic lows, but the® Forecast predicts they will probably remain at less than 7% in 2019 . This means that the situation is not necessarily getting worse for buyers, but it may not be getting better either.

So then what’s a potential home buyer to do? When researching home prices, it is important to focus on housing data for the area you’re interested in buying or selling (region/city/neighborhood). Certain markets can have increases in price or inventory while other areas have decreases. Factors that play into local housing prices and inventory fluctuations include employment, wages, migration, and more.

While a significant increase in the supply of homes could force sellers to lower their prices, this scenario may not be in the cards for 2019.

4. High-End Inventory is Growing Fastest

In looking at the inventory growth by categories, it appears overall inventory growth is being buoyed by homes on the pricier end of the spectrum. Why would this be the case? It is possible that continually rising home prices are incentivizing those with high-end homes to put their houses up for sale.

Most gains in inventory have come from upscale homes in high-growth markets such as the Silicon Valley metro area, Seattle, Boston, and Nashville. Some of these popular high-density areas could see as much as double-digit gains in inventory in 2019.

5. Millennials Will Likely Buy the Most Homes

In early 2018, the National Association of Realtors found that 36% of all homebuyers were millennials , making them the single-largest buying group by generation. There is hardly any doubt that next year, millennials will continue to make up the largest segment of buyers.

Millennials could make up as much as 45% of mortgage holders in 2019, while Gen Xers are predicted to trail at 37%, and Boomers at 17%. While being a millennial home buyer often means being a first-time home buyer, that may not always be the case according to
“While first-time buyers will struggle next year, older millennial move-up buyers will have more options in the mid-to upper-tier price point and will make up the majority of millennials who close in 2019.”

As we progress into 2019 and even 2020, it is expected that millennials will capture more of the real estate market share . In particular, 2020 could be an interesting year because that’s when the largest segment of millennials are turning 30.

Ready to buy your dream home in 2019? You deserve a home loan from a company you can trust every step of the way. Check out SoFi’s competitive rates and financing options.

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The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
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