As 2019 opened, the American economy was in the midst of one of the longest periods of economic growth in current history. This is the first time since the housing market crash of 2008 that the economy has showed such steady signs of improvement, and the effect on the real estate industry has been a positive one. Here’s a closer look at the trends that have been seen in the first half of 2019.
Home Prices on the Rise
As 2019 opened, an improved economy combined with a low inventory of available homes drove home prices up. As more buyers entered the market to take advantage of these economic factors, prices continued to climb. This is good news for sellers, because it means they will be able to get better prices for their homes.
Home Sales Are Slightly Down
Even though there is still strong competition, buyers are slowing down a bit. Overall, home sales are expected to decline by about 2% over the course of the year. This is not a terrible decrease, but it is a downward trend.
Several factors contribute to this slow down. Though interest rates are low in the summer of 2019, they have seen some higher points in previous months. May stats in Maryland demonstrated that as the interest rates have lowered, the demand for homes is on the rise. In some areas, such as the DC market bidding wars are raising prices even further with many bids well in excess of asking price.
The Demographic of Home Buyers Is Changing
Another trend in 2019 is a change in the demographic of today’s homeowner. A whopping 37% percent of homeowners in 2019 are Millennials. This demographic of homebuyers are at the point in their careers where they feel they are stable enough to buy a home. Forbes estimates that Millennials will make up 45% of mortgages throughout this year, continuing to increase until reaching the peak Millennial home buying rates that will occur in 2020. This coincides with the retirement and downsizing trend with Baby Boomers, which means the types of homes Millennials want are available.
What does this mean, particularly for sellers? Millennials use technology to assist in their home search, so it means a strong online presence is critical to helping a house sell. Millennials are also more interested in the quality of the property rather than its size, so better upgrades and features will help it sell quickly.
Overall, the home buying and selling market in 2019 is in a good, stable place. High prices and relatively low interest rates help balance each other out, and a healthy number of perspective buyers ensures sellers will find interested people as they list their homes for sale.
If you are considering entering the market as a home buyer, the right mortgage is an important part of the puzzle. Reach out to Tom Cumpston with First Home Mortgage for help finding your next mortgage product.