There’s a lot of talk about rising home prices and increasing mortgage rates, but as we head into 2019, the housing market is actually looking pretty good — at least compared to recent years.
In fact, for Americans considering a home purchase in the new year, there’s a lot to be optimistic about. From lower listing prices to increasing construction, there are a number of positive signs for up and coming buyers.
In August, 39 of the nation’s 45 largest housing markets saw price cuts rise. Across the country, 19 percent of all listings experienced a price cut that month, averaging around $4,000 each — the biggest average price drop in three years. The biggest cuts were in pricy areas like Seattle, San Jose and San Diego.
According to the National Association of Home Builders, housing starts were up more than 9 percent in August, with more than 1.2 million new units breaking ground. The NAHB says builders are “largely confident because the economy is solid and demographics point to continued demand.” The Western U.S. saw the biggest jump in starts with a 19 percent increase over July.
The days of multiple offers and endless bidding wars may finally be numbered. Last month, only 23 percent of homes sold over asking price — the lowest share since 2016 and a 2.6 percent drop over last year. The biggest dip in over-listing sales was seen in Denver, Seattle, Portland and San Francisco.
According to 100 real estate economists and experts, we’ll likely have a buyer’s market come 2020. That means we’ll see a lot of improvement over the next two years, from lower home prices and more inventory to increasing affordability in some of the country’s more expensive markets.
If you look at mortgage rates across the years, we’re seeing some serious affordability. In the ‘90s, rates at one point reach 10 percent — more than double what we’re seeing now. This makes borrowing cash more affordable for today’s consumers, meaning buying a home (or refinancing an existing loan) costs less interest in the long run.
The market has been tight on inventory for a while now, giving buyers fewer choices and driving up prices to boot. Now, it seems inventory might be on the up and up. According to Realtor.com, listings were up 8 percent in September — their largest jump in more than five years.
As inventory rises, home price growth is starting to slow down. It isn’t quite declining yet (at least not nationally), but the rate at which prices are rising is stalling. Last month median listing prices were only up 7 percent over September 2017. It might seem like a hefty hike, but it’s actually the smallest year-over-year jump we’ve seen in a while.
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