Realtor.com® researchers also predict home prices to move higher than expected. “Falling mortgage rates have given home buyers more purchasing power to balance rising home prices, but that in turn is allowing for more home price growth than was expected in November,” realtor.com® notes in its report. Realtor.com® now projects home prices in 2019 to be 2.9 percent higher than in 2018, a 0.7 percent increase over its original prediction. That falls in line with the National Association of REALTORS®’ forecast on national median existing-home prices to increase around 2.7 percent this year.
Price acceleration is slowing compared to the last few years. Home prices are currently growing at a 3.5 to 4 percent year-over-year pace. So the rate of growth is still far slower than the past few years of 5 to 7 percent, researchers note.
Lawrence Yun, NAR’s chief economist, has forecasted existing-home sales this year to decrease by 0.7 percent to 5.3 million. The decrease is mostly due to a continued shortage of homes for sale in many markets. Looking ahead to 2020, he forecasts sales figures and prices to both increase by around 3 percent.
Lower mortgage rates are helping to give the housing market a boost this spring, economists say. Yun said in a recent report on pending home sales that he does not anticipate any interest rate increases from the Federal Reserve in 2019.
“If there is a change at all, I would say the Fed will lower interest rates in 2019 or 2020,” Yun said. “That would stimulate the economy and the housing market. But the expectation is no change at all in the current monetary policy, which will help mortgage rates stay at attractive levels.”
Article taken from REALTOR® Magazine. To view the source, please click HERE.