Forecasting Housing in 2019: Not Better for Buyers, but Not Worse

Forecasting Housing in 2019: Not Better for Buyers, but Not Worse

Published by: RISMedia HouseCall Blog (Written by: Suzanne De Vita), December 2, 2018

If the expectations about housing in 2019 can be summed up in one word, it’s this: balanced.

After months and months on a runaway track, home prices have started to temper, and will continue to moderate in the upcoming year, according to new predictions by several sources. Analysts are anticipating anywhere from 2.2 to 3.79 percent growth in home prices for the year—a considerable dip from past years, but an indicator of a leveling-out market.

The deceleration, however, is not likely to overcome other pressures, like climbing mortgage rates and short starter supply, changing conditions for homebuyers and sellers. According to a forecast by®, there will be a fewer than 7 percent increase in inventory overall for the year.

“Inventory will continue to increase next year, but unless there is a major shift in the economic trajectory, we don’t expect a buyer’s market on the horizon within the next five years,” says Danielle Hale, chief economist at “Unfortunately for buyers, it’s only going to get more costly to buy, especially the most-demanded entry-level real estate.”

Meanwhile, according to Zillow, interest rates will track toward 6 percent – landing between 5.3 and 5.5 percent,’s report shows, or 5.8 percent. In the scenario, monthly mortgage payments will rise 8 percent.

For the buyers capable of paying prices today, however – and at the interest rates of tomorrow – there will be a measure of relief.

“Certain headwinds – including rising mortgage interest rates, higher rents and stiff competition for housing in the most desirable areas – will only grow stronger over the next year, but that won’t necessarily be a bad thing,” says Aaron Terrazas, senior economist at Zillow. “A slower-moving market is likely to give more buyers a chance to catch their breath and choose from a wider selection of homes that fit their preferences and budgets.”

First-timers will again be a force in 2019, accounting for 45 percent of mortgages, according to’s report. Many will be millennials who are moving or trading up. According to Trulia, 21 percent of millennials are planning to purchase in the next year.

Given the buyer dynamics, 2019 will continue the favorable market for sellers, as well—but not everyone will garner multiple offers, as in recent years. According to the forecast by, sales will soften for the year, down 2 percent.

“For the first time in a while, home seller sentiment has decreased,” Young says. “I think people, net, are still thinking it is a good time to sell, but it is not as favorable as it was last year.”

One critical development in 2019 is the effect of the Tax Cuts and Jobs Act. According to the research by Trulia, half of homeowners believe they will not benefit from the changes when they file their taxes – and many,’s report shows, will have a bigger bill at tax time. How housing will be impacted overall is unknown.

Another development is disasters, which are growing in intensity and number. Following two devastating hurricanes and the wildfires this year, analysts are expecting more occurrences in 2019.

The Takeaway
With the burn-out in home prices, and rates rising, housing has been inching toward normal this year, and is anticipated to stabilize through 2019. Battered buyers may have improved prospects in the upcoming year, but will still contend with cost and inventory pressures.

“2019 looks to be a pivotal year as the market cools and transitions from one marked by robust recovery into one more in line with historic norms, and more balanced between buyers, sellers and renters,” Terrazas says.

Regardless of the outcome, for practitioners, it’s business as usual.

“I’ve been through four downturns, and I’m making my agents aware that it can turn on a dime,” says Charlie Richardson, founder and senior partner of Richardson Properties | Christie’s International Real Estate, based in San Luis Obispo, Calif. “There are a lot of things that are hard for us to control. Prices were increasing, and I think that will taper off a little bit, but as far as I can see, we’re going to have a good year.”

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Forecasting Housing in 2019: Not Better for Buyers, but Not Worse

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