By Melissa Dorman, April 30, 2019
Recent REALTOR®.com Forecast
As per the recent revised forecast from REALTOR®.com: “Mortgage rates will drop, while home sales will not fall as dramatically”.
According to Danielle Hale, chief economist of REALTOR®.com :
“We believe 2019 will be characterized by lower, but still increasing, mortgage rates that will buoy home prices and sales by boosting buyers’ purchasing power beyond what we initially projected.”
Forecast Implications
Lower mortgage rates means increased purchasing power for the buyers.
As a result, home sales will also increase, and in overall experience a much smaller drop than initially forecasted.
Background details
The previous prediction from REALTOR®.com was in Fall of 2018 . Back then we expected to have a rough home-buying season this year.
But with the latest updated prediction there’s reason to remain hopeful. It gives US Housing market a rosier picture.
Realtor.com on Tuesday 04/23/2019, issued a revised forecast, projecting a more robust market than originally predicted.
Revised Forecast in details
Previous Forecast
While the original forecast predicted mortgage rates to reach 5.5 percent by the end of the year,
Home prices were expected to increase by 2.9 percent as per the prediction made in fall 2018.
The number of home sales was expected to drop drastically by 2 percent.
Updated Forecast
The latest updated forecast indicates mortgage rates will likely peak at 4.5 percent. Nearly a percentage point lower than the original forecast.
Home prices were still expected to increase but by 2.2 percent as per the latest prediction.
Additionally, the number of home sales will experience a much smaller drop than initially forecasted.
It is expected to drop by only 0.3 percent instead of 2 percent.
Detailed Comparison
With the fall in the mortgage rates and as more homes hit the market, REALTOR®.com has updated its home-buying forecast for the end of 2019.
“The 2019 housing market is different than what we predicted in fall 2018, primarily due to an unexpected drop in mortgage rates in January 2019,”
Realtor.com Chief Economist Danielle Hale also submitted a prepared statement.
(Courtesy of REALTOR®.com)
Conclusion
Lower mortgage rates increases purchasing power, so more homes are expected to sell than originally predicted.
So this ultimately is reflecting optimism for a much stronger market.
This will create a slightly hotter, but still cooling housing market, reflecting optimism for a much stronger market.
So the previously expected level of slowdown in sales is not likely to take place for 2019.
Melissa Dorman is a Oregon and Washington Licensed Broker with Yascha Group at Living Room Realty in Portland, OR. Follow Yascha Group on Facebook.
Melissa Dorman
Broker | OR & WA
She/They
Ten years ago, Melissa was living in a slum in Kolkata, India, helping over 200 women escape sex trafficking by providing alternative work at a social business.
It was there she discovered her passion for financial education as a means of empowering people to move out of poverty. After graduating from UCLA with a Masters, Melissa spent 5 years working as a Social Worker; assisting clients facing homelessness, in jail, or at a psychiatric facility.
As much as she loved the work, imagining saving for retirement on the meager salary of a social worker was becoming grim. That's when Melissa discovered "passive income." In no time, she fell in LOVE with real estate as a vehicle for wealth. Soon after, Melissa began locating off-market multi-family properties to purchase through creative financing strategies and win-win opportunities. Two years into investing, Melissa quit her day job as a Social Worker to become a full-time broker and investor. Initially, she was drawn to people in difficult circumstances, so she developed extensive experience assisting families facing foreclosure, short sales, and probate. Melissa is well versed in helping her clients overcome complex real estate challenges.
Currently, Melissa is teamed up with Super Broker, Yascha Noonberg at Living Room Realty. Together they assist clients to achieve their real estate dreams, including how to strategically buy and sell a personal residence to maximize profits. Far from the slums of Kolkata, her greatest passion now is empowering other working professionals to develop passive forms of income through buying multi-family properties in Portland.
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- T: 503-567-4697
- melissa@livingroomre.com
