Guest Post: Josh Mettle Predicts the Future
I hope you had a wonderful holiday season and are off to a strong start to your 2019!
As we enter 2019, after nearly a decade of above average real estate appreciation, many of our clients are asking what we think will happen in 2019.
I’ll save you from reading the rest of our forecast if you want the short version.
We agree with the 104 out of 105 economists, market analysts, and real estate experts whom were polled and are forecasting positive real estate appreciation nationally. We believe appreciation slows in 2019 to a more normalized level but remains positive and strong enough to add significant wealth to U.S. homeowners. Yes there are some (mostly coastal) areas that have been unsustainably hot over the last few years, they will likely continue to cool down a bit, but nationally we believe real estate will appreciate in 2019.
Here’s what we are seeing now and our official forecast for 2019.
With The Fed no longer buying Mortgage Bonds and Treasuries, we expect the stock market to be choppy and volatile. We do believe stocks will find their footing by summer and will be up by end of the year 2019. The volatility in the stock market will be good for interest rates, if the stock market regains its ascent, rates will likely suffer.
Fed has forecasted two more rate hikes in 2019. Inflation should rise with higher oil prices and wage pressures (wages have been on the rise nationally) keeping pressure on the Fed to raise rates.
With an uptick in inflation forecasted from wage increases and an expected increase of oil prices, we see mortgage interest rates ticking higher and will spend most of the year between 5.0% and 5.5%.
As the stock market finds its footing, we believe that will bring confidence to real estate buyers and we will see a strong spring market rebound where once again there are more buyers than there are sellers in most markets around the country.
We are predicting appreciation nationally in the 3.5% to 4% range nationally, expect higher appreciation rates in areas where job growth and wage inflation is above average.
We continue to believe that the first quarter of 2019 will be the best time of the year for homebuyer. We are seeing interest rates in the mid four percent range and many clients are successfully able to negotiate sales prices and seller paid closing costs, which can be used to permanently buy down the interest rate on their home loans.
As the stock market regains its footing and the spring buying season begins, buyers will once again exceed sellers, prices will rise, and interest rates will as well. A buyer in the summer or fall 2019 will likely see higher home prices, less seller paid closing costs, and higher interest rates.
I’d invite you to call or email me directly if you have any additional questions.
Fairway Independent Mortgage Corporation