New Year, New Market

The new year is upon us and with it, we can always expect changes from our resolutions to the real estate market.

So what can Realtors expect in the new year? We've rounded up the highlights of the 2019 real estate predictions -


Mortgage Rates will Rise 

Mortgage rates will likely cause an issue for affordability in 2019. Although rates have been rising throughout the past two years, mortgage rates still remain lower than they were during the recession. According to Aaron Terrazas, director of economic research with Zillow, interest rates "will change in 2019, as the 30-year, fixed rate mortgage reaches 5.8 percent - territory not seen since the dark days of 2008, when rates were racing downward in response to the housing crisis. In 2019, rising rates will compound the effect of still-climbing home values, making homeownership even less affordable."

Millennials will Keep Buying 

Despite these rising mortgage rates, millennials will still be the largest generation of buyers, accounting for 45 percent of mortgages, according to Realtor.com. 37 percent of mortgages will be bought by Gen-Xers, compared to only 17 percent from Boomers. Although first-time home buyers will struggle, according to Forbes, a large portion of millennials will be turning 29 this year "Entering peak household formation and home-buying age, and contributing to the increase in first-time buyer demand." As for the future, millennials are predicted to make up "the largest share of home buyers" for the next decade as their housing needs develop and change.

Inventory Troubles to Ease 

Housing inventory has undoubtedly been an issue as it the lowest level in recorded history last winter. However, in October, the inventory levels finally rose to positive, and according to Realtor.com, inventory in most markets has been increasing slightly while the pace of sales have also slightly slowed. That being said, wide-spread inventory gain is not predicated for 2019, and the national inventory increase will remain low for the new year at less than 7 percent.

Home Sales Expected to Decline 

2017 saw the best home sales year in a decade, but have been on a decline since then. 2019 will be no different according to Realtor.com, which predicts a 2 percent decline. Ruben Gonzlez, chief economist at Keller Williams, says "we're expecting it to be another slightly slower year as buyers continue to wrangle with higher mortgage rates after contending with several years of rapid price growth."

Tax Plan Questions 

April of 2019 will bring about the first year of the income tax process with the new tax plan. According to Realtor.com, renters will see a benefit with lower rates and higher standard deductions, but for homeowners, it's questionable. Some will find lower tax bills from lower rates and higher standard deductions, but others may find limited itemized deductions and personal exemptions that will result in higher taxes.

For a pictorial representation of what 2019 may bring for the real estate industry, check out this infographic from Realtor.com.

No matter what happens, the new year will certainly bring changes. Don't forget to check our blog and follow us on social media for all the latest news in the real estate market!