Despite slowing price growth and slowing sales in many parts of the U.S., the national housing market is still going to become less affordable for many buyers next year, thanks to both rising prices and rising mortgage interest rates, according to a new forecast from Realtor.com. That means a true buyer’s market is not on the horizon.
Though the forecast, out today, offers a few glimmers of hope for buyers, it paints an overall dour picture of the 2019 housing market as both buyers and sellers are forced to adapt to more expensive housing transactions.
Perhaps most significantly, Realtor.com expects mortgage rates to average 5.3 percent in 2019, and to hit 5.5 percent by the end of the year. That increase comes after multiple interest rate hikes in 2018, and will ultimately make buying a home 8 percent more expensive next year, according to the forecast.
The rising cost of buying a home will likely slow price growth, which Realtor.com expects to average 2.2 percent, and lead to a modest increase of 7 percent in home inventory.
Danielle Hale, a Realtor.com economist, suggests overall 2019 will continue the softening trend that began in 2018.
“It’s going to be a tougher year in some respects,” Hale said.
Home price gains slowed to 5.5 percent in September, year-over-year, according to the latest S&P CoreLogic Case-Shiller National Index. Year-over-year growth was down from 5.7 percent last month and the second time in 12 months price gains fell under 6 percent.