RISMedia's Real Estate Magazine

JAN 2019

Real Estate magazine is the industry's leading source for real estate news and information since 1980. Published monthly by RISMedia, Real Estate magazine offers timely and relevant real estate news to the industry's top brokers and agents.

Issue link: http://remag.rismedia.com/i/1066259

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Page 28 of 118

24 January 2019 RISMedia's REAL ESTATE After months and months on a runaway track, home prices have started to temper, and will continue to moderate this year, according to predictions by several sources. Ana - lysts are anticipating anywhere from 2.2 to 3.79 percent growth in home prices for the year—a considerable dip from past years, but an indicator of a leveling-out market. The deceleration, however, is not likely to overcome other pressures, like climbing mortgage rates and short starter supply, changing con - ditions for homebuyers and sell- ers. According to a realtor.com® forecast, there will be a less than 7 percent increase in inventory over - all for the year. "Inventory will continue to in - crease, 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," says Danielle Hale, chief economist at realtor.com. "Unfortunately for buyers, it's only going to get more costly to buy, especially the most- demanded entry-level real estate." Meanwhile, interest rates will track toward 6 percent—landing between 5.3 and 5.5 percent, realtor.com's report shows, or 5.8 percent, accord - ing to a forecast by Zillow. In the real- tor.com scenario, monthly mortgage payments will rise 8 percent. The increase is an obstacle for renters; in fact, it is now the "biggest challenge" toward purchasing for 19 percent of renters, according to a forecast by Trulia. Thirteen percent said the same this spring. "I believe we're going to see rates go toward what they were 10 years back coming out of the recession: closer to 5.25, 5.3 percent," says Cheryl Young, senior economist at Trulia. "The real issue around afford - ability and rising interest rates— whether or not people know how much that's going to impact their monthly mortgage payment—is the fact that prices have been outstrip - ping wage growth. The bottom end of the market, especially first-time homebuyers, are already feeling the squeeze, so any rise in inter - est rates takes another bite out of affordability." For the buyers capable of paying Forecasting Housing in 2019: Not Better for Buyers, but Not Worse by Suzanne De Vita I f the expectations about housing in 2019 can be summed up in one word, it's this: balanced.

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