Slower Arlington VA real estate market in 2019?
This just in …. though I’ve been hearing many similar rumblings recently about a market slow-down and better balance between seller supply and buyer demand ….
RISMEDIA, Tuesday, December 18, 2018— With the economy expected to slow in the upcoming year, the housing market—namely prices and sales—is set to stabilize, according to analysts at Fannie Mae.
For 2019, Fannie Mae’s Economic and Strategic Research Group is anticipating an ease-off in home prices, which have run up unsustainably, by many measures, for months. According to the Case-Shiller Indices, the boom in home prices sputtered over the summer, and continues to lose steam. By the same token, home sales have struggled throughout the year, burdened by costs and the inventory shortage.
Meanwhile, mortgage rates will rise, indirectly influenced by monetary policy, Fannie Mae’s forecast shows. Rates surpassed 4 percent this year, and economists are expecting them to pass the 5 percent threshold in 2019. As of last week, the average 30-year, fixed rate was 4.63 percent.
“The labor market continues to be one of the economy’s high points, and with inflation hovering around the Fed’s 2-percent target, we maintain our call that the Fed will hike rates once more in December and two more times in 2019, despite rising market expectations of fewer hikes amid stock market volatility,” says Doug Duncan, chief economist at Fannie Mae. The Fed will announce its decision on Wednesday this week.
If Fannie Mae’s forecast pans out as predicted, homebuyers could be—somewhat—spared, Duncan says.
“If mortgage rates trend sideways next year, as we anticipate, and home price appreciation continues to moderate, improving affordability should breathe some life into the housing market,” says Duncan. “However, affordability is likely to remain an industry concern, particularly among first-time homebuyers.”
The economy will expand 2.3 percent in 2019, according to the forecast—a drop from the 3.1 percent expected for 2018. By 2020, it will fall further, to 1.6 percent.
“Fading fiscal policy, worsening net exports and moderating business investment all contribute to our projection that GDP growth will begin to slow in 2019,” Duncan says.
Suzanne De Vita is RISMedia’s online news editor. Email her your real estate news ideas at firstname.lastname@example.org.