Whether you’re looking to buy or sell a home in 2019 – or find the perfect rental – it helps to know what you’re up against. In many markets, the trend of a low volume of homes on the market compared to the number of buyers that has been fueling bidding wars and rapid increases in home prices may losing steam, but rising interest rates may also cause more buyers and sellers to hold off on making a new deal.
The U.S. housing market is a major indicator of the strength of the economy. When the economy is strong and people are confident about the future, they are more inclined to buy houses, upgrade their current homes or buy larger houses. When they are more concerned about the economy, new home construction, remodeling, median prices and housing sales are all depressed. For years, real estate was considered a reliable way to increase personal wealth because the cost of property and housing consistently increased over time. However, the housing bubble of 2006 that led to a steep decline in housing prices was the primary cause of the Great Recession in the U.S., destroying the credit of millions of people who were suddenly underwater in their mortgages and impacting the housing market for the greater part of a decade. Government regulations have since tightened mortgage requirements for many buyers, and they have greatly impacted the subprime mortgage industry that collapsed during the Great Recession.
The most common topic of conversation for potential homebuyers and sellers going into the new year is about rising interest rates. Mortgage rates are at their highest mark since 2011, and while higher interest rates are a sign of a good economy – especially compared with historically low unemployment rates – the change has many consumers hesitating about jumping into the housing market.
The decline in active buyers will likely lead to a slowing growth of home prices across the U.S. While prices have outpaced wage growth in many major markets for the last few years, that growth will continue to slow and possibly flatline in a couple areas, particularly in smaller metro areas where price growth hasn’t been as quick.
Homeowners looking to sell their property may be hesitant to put their home on the market because that also means purchasing a new house, which more often than not requires a brand-new mortgage and more current interest rate. As a result, consumers can expect continued low inventory of houses on the market while buyers and sellers try to adjust to new rates. Contact us at Sell My House Fast, and we will walk you through the the process.
Instead of selling, homeowners will continue to build equity as they make monthly payments on their existing mortgage and improve the property to increase its value, which will allow them to see greater profits when they decide to sell.
Sell My House Fast operates nationally in all major metropolitan areas with an emphasis on Dallas homes.