Here’s a look at realtor.com’s housing forecast for 2019. Look at rising mortgage rates to play an even greater part in affordability, slowing the market for sellers and impacting buyers. Home prices are still expected to rise, though at a much slower rate than we’ve become accustomed to. Realtor.com forecasts home prices to increase by 2.2% nationally.
There are some exceptions. Areas from the 50 largest markets forecasted to have the largest price increases include Grand Rapids, Michigan at 8.2%, Las Vegas-Henderson-Paradise, Nevada at 7.9%, Boise City, Idaho at 6.9%, Denver-Aurora-Lakewood, Colorado at 6.8%, and Deltona-Daytona Beach-Ormand Beach, Florida at 6.3%.
Realtor.com expects mortgage rates to hit 5.5% by the end of next year. What that means in real money is the average home will cost 8% more per month than in 2018. Home sales could decline by 2% next year. These numbers aren’t startling by themselves. It’s comparing the market to the boom times of the past few years that have the money pundits warning of a significant housing market downturn.
Buyers still don’t have a lot of good news to look forward to. “Unfortunately, it’s only going to even cost more to buy, especially in the entry level market. To be successful, buyers should think through how they’ll adapt to higher rates and prices,” explains Danielle Hale, realtor com’s chief economist. “Some buyers will be thinking I can’t even afford a home. They will have to struggle with the decision of what they want versus what they really need,” Hale adds.