What to Expect in the Housing Market in 2019

 mortgage and housing market predictions 2019

With most of 2018 behind us and 2019 right around the corner, it’s time to take a peek at what’s in store for the housing market in 2019. While we don’t expect any major shake-ups in real estate, we do feel confident the market will tighten as home prices continue to hold strong. 

The Housing Market in 2019: Where Are We Now and What’s Next

Federal Funds Rate Increase, Mortgage Rates Mostly Steady


For the past year, home prices have been on a gradual climb. At the same time, the Fed has raised the Federal Funds rate (AKA interest rates) three times in 2018, with one more rise expected before the end of the year.

The Fed recently announced that interest rates are “just below” the level where they won’t stimulate the economy. In 2019, it’s now expected the Fed will sit on the sidelines as interest rates would be considered “at equilibrium;” a level where rates aren’t too high to dampen the economy, but not too low to overheat one. This is somewhat of a departure of tone as Q2 and Q3 GDP came in a bit stronger than expected, showing a rather robust economy heading into the critical retail season in the final weeks of the year.

However, as it relates directly to mortgage rates, we’re not looking at any major jumps in the next year. That’s good news for prospective homeowners watching the housing market in 2019 for their time to buy, or for homeowners looking to refinance or move up.

Numbers Show Stable Growth for the Housing Market in 2019

Compare current rates to the same time last year and you’ll see a full percentage point rise in the cost of funds over a 12 month period. In December of 2017, the average 30-year conforming fixed rate was near 3.94%, according to Freddie Mac’s weekly mortgage rate survey. At the end of November, that same rate came in at 4.81%.

Remember, the overall increase in interest rates arrived through three separate rate bumps by the Fed over the past year. Inflation numbers have also softened. The Fed likes to see inflation somewhere near a 2.0% annualized rate. It’s this number that shows an economy is on the move, but not overheated. This is good news for both buyers and sellers going into the 2019 housing market. This inflation rate indicates stable economic growth, not likely to precipitate a precarious housing market spike or a sudden drop.

Home Inventory Remains Low, But Set to Rise

Homeowners today still hold the upper hand as it relates to price negotiation, and seller concessions or credits are few and far between. With demand still outpacing supply, sellers don’t have to offer much of anything as a buyer incentive.

Builders haven’t stood still though, and home buyers should soon see more newly built homes on the market compared to just a few months ago. However, many newly completed homes as well as existing homes probably won’t enter the market until the spring, and this is when you’ll start to see a more significant rise in inventory in the 2019 housing market

2019 Housing Market Still Heating Up for Home Buyers

Couple the tight housing inventory with the slight increases in financing costs in 2019, and it’s easy to see that waiting to buy will simply cost more in the long run. However, with high demand on existing homes and new homes ready to hit the market, the housing market in 2019 may see a shift in home buying patterns. Home buyers who are ready to buy might decide to skip the competitive bidding on existing homes and go straight for newly built homes instead.

For Home Sellers, It’s Time to Move Up

Homeowners who are thinking of taking advantage of the current seller’s market can take those profits and finance a newly built home. They may also be surprised at the amenities brand new homes have compared to an existing home.

With interest rates still being historically low, it’s probably a very good time to make a move. The forecast for 2019 is for higher home prices all around, with mortgage rates continuing to see a gradual move upward.

Don’t forget, interest rates can change daily and sometimes can change even throughout the course of a single business day. When researching interest rates, call us directly for a live rate quote and compare different loan programs, rates and terms in real time.

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