The National Forecast
Tougher Road Ahead for Home Buyers and Home Sellers according to 2019 Housing Forecast from Realtor.com®
“The 2019 housing market will see modest inventory gains, but with mortgage rates expected to hit 5.5 percent by the end of the year, monthly mortgage payments will rise 8 percent putting home ownership more out of reach especially for younger Gen-Z, Millennial, and other first-time home buyers.”
“Forecast Highlights
- Home price growth will continue to slow, with a forecasted increase of 2.2 percent
- Inventory increases will remain moderate with less than a 7 percent increase
- High-priced markets will buck the trend, with double-digit inventory gains
- Millennials will account for 45 percent of mortgages in 2019 vs. 17 percent for Boomers
- New tax plan will be good for renters, mixed for homeowners”
“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.”
“Millennials will continue to make up the largest segment of buyers next year, accounting for 45 percent of mortgages, compared to 17 percent of Boomers, and 37 percent of Gen Xers. While first-time buyers will struggle next year, older millennial move-up buyers will have more options in the mid-to upper-tier price point and will make up the majority of millennials who close in 2019. Looking forward, 2020 is expected to be the peak millennial home buying year with the largest cohort of millennials turning 30 years old. Millennials are also likely to make up the largest share of home buyers for the next decade as their housing needs adjust over time.”
Ellen Paris, commenting on the 2019 National Housing Forecast in Forbes said, “Sufficient affordable inventory is still a problem for first-time buyers, and don’t expect that to change in 2019.” But she also cautioned that this will be a different kind of seller’s market: “The days of multiple offers and bidding wars resulting in properties selling at a premium above asking price are fast becoming history in many markets.”
The Local Forecast
Every local market in the United States is different. Lenawee offers good opportunities, even for first time home buyers!
Sperling’s Best Places lists and compares demographics and statistics for U.S. communities. It shows the current national median price of a home is $216,200 versus $134,300 in Lenawee (comparable house). By my calculation, that makes the median value of a home in Lenawee about 62% of the national median. According to the U.S. Census Bureau, the 2018 national median income is $61,372, while Sperling’s shows Lenawee median income at $48,118, or 78% of the national. The overall Cost of Living in Lenawee is almost 10% lower than the national Cost of Living index (Sperling’s).
Comparing median home values and incomes and factoring in a 10% lower of cost of living points to Lenawee as a much better than average opportunity for move-up buyers and first-time buyers. First-time home buyers may find special financing or other assistance.
For virtually everyone entering the market, both buyers and sellers, it makes all the difference to work with a local, well-respected and very knowledgeable REALTOR® to guide them through the process Many Lenawee REALTORs specialize in a few geographic areas in the county, even specific market segments and neighborhoods. Their insights and experience can prove invaluable in helping clients achieve their dreams and goals.
Below, two of Lenawee County’s market leaders provide insight on their approach to the local, real estate market.
Joe Wagley: Over the past two years, we’ve seen a radical increase in the listing prices of homes. With this, many buyers, specifically first-time home buyers, have backed down from the market due to affordability and practicality. As winter peaks and the market begins to ease back down (prices are usually lower in the winter) it can be expected that buyers will dip their toes in and revisit the market. Homes across the area are seeing price cuts; this season will be a prime opportunity for home ownership, especially for those buyers who have been unable to compete with the hot real estate market we have faced in Southeast Michigan.
As always, buyers are asked to seek pre-approval before scouring the market. A pre-approval will save a buyer valuable time and energy viewing homes that might be beyond their monthly housing budget. We recommend you stay conservative with your price point.
Nationwide, fixed mortgage rates are virtually an entire percentage point higher than they were a year ago, hitting nearly 5%. It’s anticipated that mortgage rates across the country will continue to rise, forcing many individuals to more vigorously scour the market now, hoping to nail down a home before mortgage rates raise another percent.
Things will inevitably change in 2019, but what won’t change is our desire to serve you. Here at The Wagley Group we want to come alongside you and cater our services to your direct needs.
Jeff Rising: “We are currently in a seller’s market here in Lenawee County. What this means is simply that there are a lot of home buyers in the market, but very low inventory of homes on the market for sale. What we do here at RE/MAX Main Street Realty is take a very proactive approach to finding our buyer clients homes. We make a strong effort to go out and find homes that may or may not be on the market to see if they are interested in selling. This has proven to be very effective at helping our buyer clients find homes.”
“What a seller’s market means for sellers is that they are often times receiving multiple offers. So, our job then is to evaluate the merits of each offer and advise our clients on which would have the best possible benefit for them in choosing one to accept. Then seeing that process through to the closing table.”
Blog Article Written by: David Munson
December 2018
