The year is rapidly coming to a close, and it’s important to start thinking about how 2019 will shape up economically. We sampled some of the predictions from market experts to see how 2019 might look for those seeking to purchase a new home.
Most experts are predicting a growth rate of between 3 and 5 percent for the United States economy over the next year. If this is true, the result could be an increased number of first-time homebuyers entering into the marketplace due to increased wages and savings. Throughout 2018, the growth of the economy has resulted in an influx of homebuyers while inventory has somewhat stagnated. This means that we’ve had more demand than supply, driving up prices and creating a seller’s market. But while 2019 is expected to follow similar economic growth trends, experts are optimistic about consumer confidence.
A Buyer’s Market May Be Forming
The main reason for increased confidence despite an expected rise in demand is that experts predict that the amount of new construction will increase. In other words, supply may start to catch up with demand, leading to a buyer’s market and lower home prices. If you’re looking to sell your home, you may want to start getting the ball rolling now. If you’re looking to buy, it may be best to wait until the first few months of 2019 for those decreased prices to start showing up in the market.
A Word of Caution: Mortgage Rates and Inflation
On the other hand, one issue that has caused an increase in mortgage rates in the past year is the rise of inflation. Right now, inflation is holding relatively steady at 2%, which is the maximum with which the Federal Reserve is comfortable. As the economy continues to grow, inflation may increase, which would drive up mortgage rates and cause homebuying to be a bit out of reach for some of our budgets. Keep an eye on inflation, but don’t let it distract you from the optimism most experts are showing.