June 2019 Market Updated
Halfway Through 2019
Where Have We Been and Where Are We Going?
The first half of 2019 surprised housing markets across the country as, contrary to what experts had predicted, mortgage rates fell. This is welcome news for home buyers and home sellers alike. For buyers, more will qualify to buy homes and their monthly payments will be lower. For sellers, the increased number of qualified buyers means more competition which typically translates to faster sales. The current drop in interest rates is particularly important for sellers now, as rate increases over the past three quarters seem to have tempered the seller’s market which has existed since August of 2012. Buyers continue to compete for a short supply of homes, but we are seeing that the market isn’t quite as tilted in favor of sellers as it seemed in 2018.
Inventory has grown, not substantially, but steadily since the middle of February this year. We still see instances of multiple offers on homes and offers with acceleration/escalation clauses in competitive situations, however the frequency is far less than the levels we became accustomed to in 2018.
Forecasters now predict that the 30-year fixed will remain relatively steady through year’s end, and we tend to agree. Following the Federal Reserve meeting last week, 30 year fixed rate mortgages settled around 3.75%, hitting their lowest levels since November of 2016. Hopefully this softening of mortgage rates means discussions and concerns about housing affordability will be tabled, at least for a while.
Looking ahead, central bank officials have hinted that one rate cut is possibly on the table for later this year. As a buyer, the question then becomes, “Should I wait?” Our unequivocal answer is “No!” If the Feds do make a rate cut, it will be a minor one…likely 1⁄4%. That small change will not dramatically affect the monthly mortgage payment you make, but could increase competition for the home you want by adding more buyers to the mix.
Our advice? If you find the home you want now, buy it now.
Advice for sellers? Same as for buyers: Do it now! If the Feds do make a rate cut, it will likely happen late in the third quarter of this year, if not beyond. Fewer buyers tend to be looking for homes in cold weather months which means your days on market could increase. And no seller wants that.
As always, Restaino & Associates is proud to be your Realtor of choice. We look forward to putting our entire team to work for you in your next real estate transaction.