Disclaimer: The author has no affiliation with any of the products, services or companies discussed in this article.
Real estate aficionado Ron Cadman will have strong beliefs on how the world of real estate will be affected this year and the years to come. The ever changing directions of the housing markets affect buyers, sellers, and everyone in between.
Trying to keep up with the erratic behavior of the housing market can feel like a chore. If you’re wondering what the trends for the remainder of this year and the next few years will look like, listen to the wise words of Ron Cadman. Here’s what he (and other reputable sources) have to say about the housing market in 2019.
You can expect mortgage rates to rise
The average mortgage rate is still lower than the rates experienced during the recession, but they have been slowing creeping up over the past 2 years. You can expect this trend to continue in 2019. The fixed rate mortgage will reach 5.8% or higher this year. Who knows what will happen next year though.
Millennials will be active in the housing market
The group of millennials in the 27-29 age range are in a pretty position to start buying up available houses on the market. Since these individuals have reached the ultimate age for home-buying they’ll continue to be one of the most active groups in the housing market.
One study says that “Millennials will continue to make up the largest segment of buyers next year, accounting for 45% of mortgages… Looking forward, 2020 is expected to be the peak Millennial home buying year with the largest cohort of millennials turning 30 years old. Millennials are also likely to make up the largest share of home buyers for the next decade as their housing needs adjust over time.”
The number of home sales will drop in 2019
Buyers will be dealing with the increasing mortgage rates this year; needless to say this is a major deterrent in the homebuying process. It is expected that home sales for the year will drop to 2%, which is lower than the average rate we’ve seen in recent years.
The average cost of rent in the US will rise
In recent years we have actually seen a slight drop in the average rate of rent across the country. But this trend will stop and will actually reverse. Since position buyers won’t be in a great position to buy this year (due to higher mortgages) they might be too financially stressed and be forced to continue renting. And with higher mortgage rates, your landlord or property manager will have to charge more for rent.
The instances of shared commercial properties will increase
Julien Bonneville says that “as co-working continues to be a disruptor in commercial real estate, the largest traditional landlords have opened their own flexible and co-working options to compete… To meet these demands and gain a competitive edge, landlords are opening up to fintech/insurtech solutions like replacing security deposits with surety bonds to make tenants lives easier.”