Moorhead Real Estate | What are home interest rates looking like in 2019?
The outlook for real estate in the Fargo Moorhead area looks strong even with all the head winds we have had in 2018. Our thoughts at Modern Market Realtors are that rates will remain stable thru 2019, in spite of the tariffs and the govt shut down. Chances look great for business as ususal in the Fargo Moorhead area. But don't take our opinion here is what the big boys say.
National Association of Realtors
The National Association of Realtors expects home sales to flatten and home prices to continue to increase, though at a slower pace.
“The forecast for home sales will be very boring — meaning stable,” said Lawrence Yun, NAR chief economist.
NAR expects sales to increase 1 percent to about 5.4 million and the median home price to rise 3.1 percent to around $266,800 in 2019, and $274,000 in 2020.
“Home-price appreciation will slow down,” Yun said. “The days of easy price gains are coming to an end, but prices will continue to rise.
Because of diminishing affordability from mortgage rate and price increases, Realtor.com forecasts a 2 percent decline in home sales. But buyers looking for high-end homes in pricey metro areas should have more options. Realtor.com expects price growth to slow, rising just 2.2 percent in 2019.
“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,” said Danielle Hale, chief economist for Realtor.com. Realtor.com has mortgage rates averaging 5.3 percent in the coming year and reaching 5.5 percent by the end of 2019, making the average home purchase 8 percent more expensive per month than 2018.
National Association of Home Builders
After a strong start last year, home-builder confidence fell to its lowest level in more than three years by the end of 2018. Several of the big home builders downgraded their sales or orders forecasts for 2019.
“The market has slowed,” said Robert Dietz, chief economist for the National Association of Home Builders. “We’ve revised our forecast down.” Builders face significant head winds because of the “five Ls” — labor, lots, laws, lending and lumber. A labor shortage, lack of buildable lots, onerous regulations, strict lending and tariffs on supplies such as lumber have increased their costs, says Dietz. Builders have taken a lot of heat for not building enough homes or building primarily luxury homes. But Dietz said there has been an uptick in townhouse construction, a more affordable single-family option.