According to new research by Zillow, the predicted housing marketplace in 2019 isn’t looking great. In reality, mortgage interest rates are expected to increase, causing ripples throughout the market in increasingly negative ways.
Zillow reports that the average 30-year mortgage, fixed rate mortgage will probably hit down to 5.8%, lows that have not been observed since the recession of 2008.
This will cause homes to become less affordable than ever, thus discouraging new buyers by purchasing homes while inviting current homeowners to cling desperately to their low rates.
But that’s not all.
The forecast for renters also appears grim thanks to the increasing rates of home worth. As more people start to rent in order to avoid purchasing a home, the expense of renting will have a sharp upswing to accommodate the greater need.
The ripple continues to spread outward. Daily commutes are expected to infect more people begin settling in affordable suburban areas and commute to more profitable cities. It is projected that the purchase price of a home in central Boston prices 303% more per square foot compared to average house in the suburbs.
Additionally, it is estimated that soon-to-be sellers may need to make some sacrifices because of the changing marketplace. This might include offering an incentive such as a cut to the general price or making expensive repairs in otherwise good houses.
Although around 90% of new houses are equipped with ducted HVAC systems, vendors with older homes might wind up installing new ductwork to compensate for the decreasing market.
Other homes may concentrate on enhancing their house’s roof or perhaps the quality of water. During the United States, it’s estimated that 85% of homes have water that’s high in magnesium and calcium.
And Zillow isn’t the only real estate expert that’s weighed in on the topic. Realtor.com’s chief economist, Danielle Hale, thinks that buyers might have to downsize or remove certain houses of the list entirely.
“With less demand in the current market, there will be fewer bidding wars and multiple offers. However, with inventory expected to remain limited in most markets, sellers who price can walk off with a handsome quantity of profit, but not the price jumps observed in prior years,” claims Realtor.com’s brand new report.
On top of that the average price for a house will still rise, but at a speed that is much slower than previous years. Home prices are expected to rise by a measly 2.2% in 2019 thanks to the economy’s downward spiral.
If you’re planning on moving house next year, then you might want to wait until the market’s cloudy future gets a little clearer.