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.