It Looks Like This Year Could Be A Buyer’s Market

Dated: January 11 2019

Views: 83

From my ABR newsletter: Good news for all buyers who are interested in purchasing a home this year! 

It looks like this year could be a buyer’s market for real estate as higher rates weigh on prices

  • Home values in November were 5.1 percent higher compared with November 2017, according to a report released Wednesday by CoreLogic. But that is down from the 5.4 percent annual gain seen in October.
  • The slowdown in asking prices comes as sellers face a new reality of higher interest rates and affordability worries among potential buyers.
  • CoreLogic is now projecting a smaller, 4.8 percent gain in November 2019.

It looks like 2019 could be a buyer's market in real estate, but that's not necessarily a good sign for the economy.

Home prices, while still higher than a year ago, are pulling back in most major markets, according to a report released Wednesday. Values in November were 5.1 percent higher compared with November 2017, CoreLogic said. That is down from the 5.4 percent annual gain seen in October. CoreLogic is now projecting a smaller, 4.8 percent gain in November 2019.

The decline in asking prices comes as sellers face a new reality of higher interest rates and affordability worries among potential buyers.

"The rise in mortgage rates has dampened buyer demand and slowed home-price growth," said Frank Nothaft, chief economist at CoreLogic. "Interest rates for new 30-year fixed-rate loans averaged 4.9 percent during November, the highest monthly average since February 2011. These higher rates and home prices have reduced buyer affordability."

There is also more supply on the market now, as new listings come out amid a slower sales pace. Last spring, more than half of the nation's 50 largest housing markets were considered "overvalued," meaning prices were at least 10 percent higher than their long-term sustainable levels. In November, that share slipped to 44 percent.

Mortgage rates shot up in the fall, and by the start of November the average rate on the popular 30-year fixed mortgage sat just over 5 percent, according to Mortgage News Daily. It has since fallen back, in response to the major sell-off in the U.S. stock market, and wider concerns over global economic growth. The rate hit 4.61 percent on the last day of 2018. That is still 57 basis points higher than the end of 2017.

A home awaits sale at a reduced asking price  in Glendale, California.
David McNew | Getty Images
A home awaits sale at a reduced asking price  in Glendale, California.

It looks like 2019 could be a buyer's market in real estate, but that's not necessarily a good sign for the economy.

Home prices, while still higher than a year ago, are pulling back in most major markets, according to a report released Wednesday. Values in November were 5.1 percent higher compared with November 2017, CoreLogic said. That is down from the 5.4 percent annual gain seen in October. CoreLogic is now projecting a smaller, 4.8 percent gain in November 2019.

The decline in asking prices comes as sellers face a new reality of higher interest rates and affordability worries among potential buyers.

"The rise in mortgage rates has dampened buyer demand and slowed home-price growth," said Frank Nothaft, chief economist at CoreLogic. "Interest rates for new 30-year fixed-rate loans averaged 4.9 percent during November, the highest monthly average since February 2011. These higher rates and home prices have reduced buyer affordability."

There is also more supply on the market now, as new listings come out amid a slower sales pace. Last spring, more than half of the nation's 50 largest housing markets were considered "overvalued," meaning prices were at least 10 percent higher than their long-term sustainable levels. In November, that share slipped to 44 percent.

Mortgage rates shot up in the fall, and by the start of November the average rate on the popular 30-year fixed mortgage sat just over 5 percent, according to Mortgage News Daily. It has since fallen back, in response to the major sell-off in the U.S. stock market, and wider concerns over global economic growth. The rate hit 4.61 percent on the last day of 2018. That is still 57 basis points higher than the end of 2017.

The drop in rates, however, comes amid concern over the U.S. economy. Buying a home, which is most consumers' single largest investment, is an incredibly emotional decision, and this new worry could overshadow the benefits of the drop in rates and prices.

"A strong economy helps homeowners feel confident about the value of their property," said Frank Martell, president and CEO of CoreLogic. "If recent declines in the stock market shake consumer confidence in the national economy, we may see homeowners' perception of home value change and a subsequent buyer's market emerge in 2019."

Blog author image

Barry & Kim, Hoey Team ๐Ÿ€ 239RealEstateDeals.Com LLC โ˜˜

"Your Real Estate Concierge" If you are looking for a REALTORยฎ or one-stop Real Estate Team who will fully communicate; promptly, professionally, and in detail with you, to efficiently help you wit....

Latest Blog Posts

๐Ÿ“‰ Mortgage Rates Fall for Fourth Week, Hitting 2.78% ๐Ÿก Hoey Team ๐Ÿ€ 239RealEstateDeals.Com LLC โ˜˜ Southwest Florida ๐ŸŒด

With pandemic numbers rising again from some sources; it’s shaken investors and pushed 30-year mortgage rates lower again this week, though adjustable rates moved a little higher.MCLEAN, Va.

Read More

๐Ÿšจ July 2021 ๐Ÿ“ข Just Released Market Report for Naples Area with information for all of Southwest Florida โ˜˜ Hoey Team ๐Ÿ€ 239RealEstateDeals.Com LLC โ˜˜ SW FL ๐ŸŒด

Hello,Barry & Kim with the Hoey Team ๐Ÿ€ 239RealEstateDeals.Com LLC โ˜˜ hope that you and yours are doing good; wherever you are located.Hot off the press please find

Read More

๐Ÿก Yes, Florida Homeowners Are Listing Homes for Sale ๐Ÿก Hoey Team ๐Ÿ€ 239RealEstateDeals.Com LLC โ˜˜ Southwest Florida ๐ŸŒด

Florida Realtors chief economist Dr Brad O'Connor:  More homes are being listed than you think.  Despite record-low inventory levels, the reason for current buyer frustrations isn’t

Read More

๐Ÿ’Ž LUXURY MARKET REPORT ๐Ÿ’Ž North America ๐Ÿฐ Hoey Team ๐Ÿ€ 239RealEstateDeals.Com LLC โ˜˜ Southwest FLA ๐ŸŒด

Welcome to the Luxury Market Report for June 2021, your guide to luxury real estate market data and trends for North AmericaProduced monthly by The Institute for Luxury Home Marketing, this report

Read More