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Housing, Real Estate & Mortgage Trends for 2019

The end of 2018: High mortgage rates, rising home prices, low inventory, and at times desperate buyers. Predictions for the new year were equally bleak—mortgage rates were expected to climb above 5% while home values continued to rise, pricing many buyers out of the market.

Enter 2019: A surprise twist! Instead of rising, mortgage interest rates actually fell… and fell and fell and fell. Currently, mortgage rates are sitting at around 3.8%—a far cry from the predicted 5%+.

What else does 2019 have in store for real estate? Stay tuned and see.

Interest Rates Will Stay Low

falling interest rates

After reaching a high of nearly 5% in November of 2018, interest rates have fallen more than 1% since the start of 2019—a significant and unexpected, though definitely not unpleasant, decrease. This is great news for both buyers and sellers. For buyers, it means homes remain affordable, even as prices rise. And for sellers, it means fewer buyers getting priced out of the market.

Homes Prices Will Continue to Rise

rising home prices and other real estate market predictions

Home prices in 2018 shot towards the ceiling, especially in hot markets like LA, New York, and Seattle. This year, they’re still on the rise—good for sellers—but at a much steadier rate than in the past few years. The rate at which prices will increase is a bit of a debate, though, with the National Association of Realtors hinting at a gradual increase of 2.2%, while Fannie Mae suggests a more aggressive incline of 4.3%, closer to the hikes of 2018.

Inventory Will Remain Low

buyers searching for homes for sale in baltimore

The struggle facing many home buyers today isn’t the cost of homes so much as the lack of homes for sale. Even with a rise in new construction, Freddie Mac still estimates that there is still a significant shortage of homes, thanks in part to the rise in population—and the number of younger buyers entering the market.

First-Time Buyers Are the Next Big Market

happy first time home buyers in baltimore

With millions of millennials entering their late 20s and early 30s, more and more are reaching a point at which renting just doesn’t make sense any more. They’ve achieved job stability, started saving for the future, and are planning long-term. And for many, that means thinking seriously about homeownership.

Buyers May Find More Loan Options

lots of loan options for first time buyers

With the influx of young buyers, mortgage lenders are finding more options for less traditional buyers (read: buyers with not-so-fantastic credit and less than a 20% down payment). With the aid of government programs and subsidies, more and more lenders are offering loans with more relaxed criteria for credit scores, debt-to-income ratios, and down payment percentages.

It Will Always Pay to Be Prepared

working with a real estate agent to buy a home

One of the worst mistakes any buyer or seller can make is walking into a real estate scenario without the proper knowledge, information, and guidance. Sellers bolstered by rising values and low inventory may find it easy to set an ambitious price—and consequently find themselves without any takers.

Uninformed buyers, on the other hand, are easy victims of overpriced homes or deceptive sellers. Buyers from outside the area might find a seemingly well-priced home in a not-so-great neighborhood or underestimate the traffic along their morning commute.

For both buyers and sellers, the knowledge and expertise of an experienced local agent is absolutely invaluable.

Always, Always Work with an Agent

Are you thinking of buying or selling a home in the Baltimore, Crofton, or Annapolis areas? Then it’s time to contact Kyle McCarthy. I’m here to help with all your real estate needs—expert area advice, home pricing and staging, home searches, market reports, and more.

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