The real estate market is always in flux. In 2018 the market took off quickly but quickly cooled off halfway through the year. Even with the slow market, plenty of individuals bought property last year. But what does that mean for 2019? Will the housing market thrive in the current economic climate? Whether you plan to buy or sell this year, here are some of the current trends shaping the real estate market in 2019.
Rising Prices
Since 2017, home prices have risen 10%. This giant jump has been the largest increase in prices for a while. Analysts are predicting a 1% increase in home prices over the next year. The increase in mortgage interest rates and the uncertainty of the economy are the biggest factors in the rise in home prices. While this combination of the two isn’t enough to keep buyers away, it can be a deciding factor for buyers who are on the fence about purchasing a new house this year.
Mortgage Interest Rates
Mortgage rates are rising after a seven-year hiatus. While they are only projected to increase 5% for a 30-year mortgage and 4.4% for a 15-year mortgage, this is still the most they have gone up since the economic crisis in 2009. This increase is a natural response to stabilization of the economy and the rising inflation rates from the last couple of years. The rise in mortgage rates means that more people are willing to spend and borrow than before.
Millennial Home Buyers
Millennials are currently the biggest group on the market looking to purchase homes. They have finally reached an age where they are financially stable in their careers and ready to take the next steps. While some prefer to purchase property in the city, most millennials are looking to purchase their homes in middle and upper-middle class neighborhoods.
New Construction
The top five real estate markets; New York City, Washington D.C., Miami, Boston, and Dallas, have recently started to see an increase in construction. With new construction comes opportunities for investors, and an increase in property demand. Metro areas and surrounding areas will also start to see a surge in residential construction over the next couple of years. Starting to invest in these properties early could turn out to be profitable in the future.
Technology
We’re living in a modern world and are surrounded by new technology every single day. Individuals looking to purchase property are looking for homes that are up to date with the latest technology. Apart from just adding an Alexa on the counter in the kitchen, home buyers can install automatic lighting features and other technologies controlled right from their smartphones!