Embrace Home Loans issued the following announcement on Dec. 29.
This year has been a big one for real estate. We saw the start of a turn-around for buyers — more inventory hit the market, home prices started to stall, and bidding wars began to peter out.
We also saw tappable home equity hit all-time highs — giving American homeowners more financial leverage than ever before.
But will the market continue in this optimistic direction or is the bubble about to burst? What can we expect from housing as we head into the new year?
While there’s certainly no way to predict the future, here’s what experts predict is in the cards for 2019:
Increasing use of technology.
Investments into real estate and property technology hit staggering levels this year (in the double-digit billions, by most estimates), and that’s meant a whole slew of new technologies, solutions, and tools have come onto the scene.
Thanks to this, we’re going to continue to see tech play a big role in real estate. No matter what end of the transaction you’re on — buying, selling, or coordinating it — you’ll likely use new technologies at every step of the process. From using a chatbot to connect with your real estate agent to closing online and having your papers remotely notarized, we’ll likely experience what’s close to a fully digital process from start to finish, on all ends of the spectrum.
According to the recent Real Estate Sentiment Index, experts expect an uptick in adoption of three major innovations: secure communication/collaboration tools, e-closing and remote notarization technologies, and chatbots. Many of the industry’s biggest players are already doing all three.
Growing use of iBuyers — particularly for investors.
iBuyers like Opendoor and Offerpad have shaken up the market this year, giving traditional, commission-based real estate agents a run for their money. With their convenient, instant, and completely online way of selling, they’ve attracted millions of sellers from across the nation. One of their biggest proponents? That’s been investors — particularly ones interested in the single-family rental market.
According to recent data from ATTOM Data Solutions, a whopping 10% of all Opendoor and Offerpad sales came from investors this year — up from just 6% last year. Expect this trend to continue, as even more iBuying solutions hit the scene (like Knock, Zillow Instant Offers, Redfin Now, cataLIST Cash Offer).
Home prices will continue to slow down.
Though they’ve yet to start declining (at least nationally), home price growth has slowed down significantly over the last year. According to the recent S&P CoreLogic Case-Shiller U.S. National Home Price Index, national home prices increased just 5.5% from September 2017 to September 2018 — the slowest growth rate since nearly two years ago. David Blitzer, who heads up the S&P Dow Jones Index Committee even called it a sign of a “slowdown in housing.”
This slowing growth will help dampen the impact of rising mortgage rates, should they continue to increase as 2019 moves forward.
More and more millennials will be buying in.
Millennials have made up the largest cohort of homebuyers for a few years now, and that’s not going to change any time soon. In fact, according to Trulia, the largest gains in homeownership rates latest have been among Americans 35 and younger. What’s even more of a good sign for 2019? Surveys show that 21% of 18 to 34 year-olds plan to buy in the next 12 months — a 7 percentage point increase since just last year.
Millennials will likely continue to buck the trends of home buying past, too, skipping the small, starter home and opting for larger, more “forever” properties. Nearly a third of millennial buyers bought homes priced at $300,000 or higher this year, and another third purchased four-bedroom properties. This trend bodes well for millennials, as starter home inventory has been notoriously low as of late.
National rents will keep growing, pricing out many renters.
Rents have been on a steady climb for years now, and 2019 will likely be no different. In October, rents jumped in 93% of the nation’s biggest 252 cities, with Phoenix, Orlando, and Las Vegas experiencing the biggest hikes. Nationally, the average rent sits at $1420.
As rents continue to rise, this will likely drive more renters toward homeownership — especially as home price growth slows and the market begins to lean more and more toward buyers. Experts actually predict we’ll have a full-on buyer’s market by 2020, so this trend will likely pick up steam toward the end of the year.
We’re Here No Matter What
No matter what the market has in store for 2019, Embrace Home Loans is here to help you make your homeownership dreams a reality. We’ll help you find the right loan program to fit your needs and goals, whenever you’re ready to buy. Just call us today to get started or text QUALIFY to 22722 to get pre-qualified for your mortgage loan.
Original source can be found here.
Source: Embrace Home Loans