Simply put, we are seeing pressures on today’s housing market that we have not seen in quite some time. Such as a rise in interest rates. According to Forbes: “Despite steady climbing for the past two years, mortgage rates remain lower than they were during most of the recession and below average for the type of strong economic growth we’ve been experiencing. That will change in 2019, as the 30-year, fixed rate mortgage reaches 5.8% — territory not seen since the dark days of 2008 when rates were racing downward in response to the housing crisis.” — Aaron Terrazas, director of economic research for Zillowin 2019.
The double edge sword here is:
Along with rates going up there will be an increase in supply due to slowing sales, but affordability goes down resulting in a more balanced market. as rates go up, eliminating potential buyers via monthly payment, the net effect here is an advantage for buyers and as competition for a shrinking pool of buyers, home prices should level off.
If home ownership is the goal, there is a sense of urgency to find a home at a more reasonable interest rate. The same sense of urgency affects sellers as well. Rates go up, the pool of buyers goes down proportionally, but as inventory climbs, competition for buyers will increase putting pressure on prices.
For sellers, the time to hit the market is now and for buyers the same principle applies. Start 2019 off right, contact your Real Estate professional to see how they can help you reach your goals.