Looking to buy or sell your home next year? Well, you better get ready for a bumpy road.
According to new data from Realtor.com's 2019 housing forecast, rising rates and prices will make it harder to buy or sell a home next year.
The real estate website has revealed that with mortgage rates expected to reach 5.5% by the end of 2019 and monthly payments up 8%, homeownership will be more inaccessible than ever before, especially for the millennial generation.
According to Danielle Hale, chief economist at Realtor.com, these increases could force buyers to reduce the size of the type of home they are looking for and totally eliminate some potential buyers from the market.
As far as sellers are concerned, even if the market will remain "a sellers' market", a majority of them will have to be aware of these increases and will not necessarily have to wait to "name their price" and to "get it all", which is a major change. in recent years.
In addition, sellers whose price is above the median price may find that it will take longer to sell and require incentives to bid, such as price reductions.
"With less demand on the market, there will be fewer bidding wars and multiple bids. However, stocks are likely to remain limited in most markets, so sellers who apply competitive prices can still get good profits, but not the price increases seen in previous years, "the report says.
Hale says his biggest tip for homebuyers looking to buy next year is to have a wish list that helps to create a more focused search.
"The competition this year is more likely to come from looking for a home that meets your budget criteria rather than other buyers," she told FOX Business, adding that the use of tools in Online house search functions can help you target your housing search and help you. pre-approved for a mortgage.
The new tax plan is another factor that remains a big wild card for the housing market next year. Most renters will probably benefit because they will benefit from lower rates and a higher standard deduction, which should help lower taxes. But for the owners, it's a mixed bag. Realtor.com says some will benefit from lower rates and a higher standard deduction, but many others will find detailed deductions and limited personal exemptions, which could result in a higher tax bill.
"Although home sales were the highest in 2017 in more than a decade, sales in 2018 began to fall immediately after the tax plan. Although many factors affect home sales, it may be that, without property incentives, some tenants oppose the purchase, the report adds.
Here are the key findings of Realtor.com's housing forecast for 2019:
• Real estate price growth will continue to slow, with an expected increase of 2.2%
• The increase in inventories will remain moderate, with an increase of less than 7%
• High-priced markets will reverse the trend with double-digit inventory gains
• The millennial generation will account for 45% of mortgage loans in 2019, compared to 17% for baby boomers.
• New tax plan will benefit renters and mixed for homeowners