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Mortgage Trends Updated 2019

By: Pando Mortgage

3 Mortgage Trends Updated 2019

2019 is bringing some welcome developments, for buyers and mortgage borrowers. Builders are constructing more starter homes, lenders are gradually making it easier to qualify for a loan, and first-time home buyers are getting the attention they deserve. With millennials entering in large part to the workforce and home buying.  Here are some trends to follow,

1. Needed: More homes for sale

Real estate has been a seller’s market for more than six years. Allowing more buyers than homes for sale. An offsetting balance of negotiating power in sellers’ direction. It will remain a seller’s market in 2019.

Having a long seller’s market is not the ideal situation for home buyers. But the forecast has changed with the number of homes for sale is on the rise. The problem is that the pent-up demand is still expected to continue. To exceed supply, even with more homes for sale.

Realtor.com’s forecast says: “While the situation is not getting worse for buyers, it’s also not improving notably in the majority of markets. Until construction ramps up, housing costs will likely continue rising above income, constricting household formation and preventing homeownership for millions of potential households,” Freddie Mac concludes.

2. Mortgage rates rise – Act Now

From the beginning of 2018 to the middle of December, 30-year fixed mortgage rates went up a little less than three-quarters of a percentage point, to around 4.75%. Most Forecasters expect mortgage rates to continue to rise through 2019. But at a slower pace, with some lulls that will be beneficial for Refinancing and Pre-Approvals.

Freddie Mac expects the 30-year fixed mortgage rate to rise half a percentage point in 2019. While the National Association of Realtors predicts a rise of 0.4 percentage point. Fannie Mae’s forecast is for an increase of just 0.1 percentage point.

3. First-time buyers dominate

The mortgage and real estate industries are focused on serving first-time home buyers, and for good reason: “First-timers have dominated the mortgage market for the past 10 years, and their share today is still high,” according to an Urban Institute report published this summer, which adds: “We don’t see this changing anytime soon.”

Before the housing crisis, first-time home buyers took out about 40% of purchase mortgages, according to the institute. Lately, the first-timer share has been about 60%.

Experts say 80% of the growth in home sales in the past three years has come from first-time buyers. And, the reason is simple, They represent years of pent-up demand.

Data shows between the years 2007 and 2015, roughly 3 million first-time home buyers delayed buying a home, and they’re reaching that age where they don’t want a longer delay. The housing needs are really catching up with them. Many struggles come with raising a family in a rental apartment. They want and need to own a home and no is the time. Between the number of First Time Home Buyers and Millenial shoppers, we see the opportunity ahead.

 

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