Heading into 2019 I'm getting a lot of questions about what I think will happen to the housing market. One of the biggest questions I get from a lot of people is about the Fed raising interest rates because that does affect mortgage rates. Will this affect my ability to buy? Will there be enough inventory to shop for my new house? All legitimate questions to be sure. Here are a few facts to keep in mind for the upcoming year:
- Interest rates are projected to increase steadily throughout 2019, but buyers will still be able to lock in a rate lower than their parents or grandparents did when they bought their homes! (I bought my first home in 1987 and was pumped that the interest rate had just DROPPED to a flat 10%!!!)
- Home prices will rise at a rate of 4.8% over the course of 2019 according to CoreLogic.
- All four major reporting agencies believe that home sales will outpace 2018!
And if you're renting and hoping to buy a home but are worried about the rising interest rates consider this. According to the 2018 Bank of America Homebuyer Insights Report, 74% of renters plan on buying in the next 5 years, with 38% planning to buy in the next 2 years! Why? Two reasons according to this survey - 1. 52% said that rising rental costs were their top reason, and 2. over 40% of renters believe that their rent will rise every year. So really there is one reason - higher rental rates. Not just higher rates but no return on your investment. Paying rent is like helping your landlord buy his new boat...he benefits from your investment, you don't.
So when looking at the big picture, buying is still better than renting and even with the "big bad interest rate hikes" you will still be able to go after your dream home in 2019.