Despite all the uncertainty hovering over the economy, one real estate forecast for 2019 points to a silver lining for home sales this year and especially the following year.
One place where we like to review housing forecasts is the Mortgage Finance Forecast from the Mortgage Bankers Association.
After all, these people need to have their fingers on the pulse of the market as much as Realtors. If there aren’t many mortgages being underwritten, there ain’t going to be many home sales either.
But their outlook is promising.
Real estate forecast 2018 vs. 2019
For example this is how they see existing homes sales (including condos) per quarter for 2019 compared to 2018 (in thousands)
- Q1 – 5,387 vs. 5,507 last year
- Q2 – 5,553 vs. 5413
- Q3 – 5,641 vs. 5,273
- Q4 – 5,659 vs. 5,275 forecast, official tally not in
There’s an upturn predicted for EVERY quarter except for the first one.
The forecast for 2020 looks very promising, where sales are predicted to take off like one of Elan Musk’s rockets.
(Ironically, the innovator has plans to send his massive Space X rocket to Mars the first years of the next decade. Sure shows an optimistic spirit. That enthusiasm might just catch on, since we know much of the economy is driven psychologically. Just saying).
The 2020 forecast for Total Existing Homes Sales (in thousands) is very bullish.
- Q1 – 5,701
- Q2 – 5,732
- Q3 – 5,707
- Q4 – 5,722
See the bump. The MBA says home sales will be 5,387,000 these first few months but predicts growth upward to 5,701,000 in the same period in 2020.
That’s cause for optimism.
To sum it up, here’s the total forecast for existing home sales per year in the next few years:
- 2018 – 5,367,000
- 2019 – 5,560,000
- 2020 – 5,721,000
- 2021 – 5,848,000
That’s a very nice picture indeed.
2019 mortgage rates will increase slightly, but are still incredibly low
The outlook for mortgage rates which affect home sales is optimistic as well.
In 2018, 30-year fixed mortgage rates ranged around the 4.5% rate and trended upward.
For 2019, here’s the prediction from the MBA:
- Q1 – 4.8%
- Q2 – 4.9%
- Q3 – 5%
- Q4 – 5%
For 2020, the mortgage economists predict a slight bump averaging 5.1%.
Sure, many people start to panic when they see mortgage rates increase.
However, when you put a 4.8% interest rate in perspective for the rate in the past 40 years, it’s still a blessing with a big “B” for home buyers.
According to Freddie Mac, in January 1982, mortgage rates for 30-year fixed home loans were as high as 17.5%.
Ouch. Talk about burdensome monthly payments.
For decades mortgages rates hovered in the 7% to 9% range.
They finally broke into the 3.8% range in 2012.
Show that chart to any Millennial who might be concerned about mortgage rates going up.
Just point out, folks, “you ain’t seen high mortgage rates” like we used to experience in the old days.
The mortgage and real estate industry probably need to do a concerted effort this year to remind consumers how these mortgage rates are still at bargain basement levels.
A few decades ago, this writer remembers when his father told him about the 4% mortgage rate he paid in the 1960s. Wow, did that sound incredible compared to the 10% rates that were prevalent at that time.
Who would have ever thought incredibly cheap rates would drop to those levels again?
But they have. Millennials weren’t around in the 60s so they don’t realize just how good they got it.
One role of a real estate professional is to remind them.
Learn about lead gen and other upgrades
Sure, the real estate business had a nice boom going for a few years. A slowdown is inevitable. The market ebbs and flows just like the tide.
The tide might go out a little in the next few months. But the loan experts who monitor and forecast the markets closely see improvements coming quickly thereafter.
According to the MBA, keep your eye on the immediate horizon toward mid-summer. The winds are going to be blowing favorably and those home sales are going to be picking up once again.
One more point – when things slow down, business people tend to pull back on their marketing efforts. But McGraw Hill once conducted a study that found those businesses that stepped up their marketing efforts in a downturn actually did better than those who buried their heads in the sand.
And when the economy recovered, those aggressive companies were already up to speed and able to go full throttle
If you want input on some smart real estate and mortgage lead generation, social media and other marketing strategies for 2019, contact the experts at Home Junction.
We have a giant array of proven marketing tools that consumers want such as:
- Home Value Widgets (Automated Valuation Models) and plug-ins that are very effective for lead generation)
- Real Estate Data APIs that can supply a vast amount of hyper-local data from school information, school attendance zones, recent property sales, market trends, neighborhood demographics, local amenities and much more. Great fodder for social media posts.
- Geo-spatial boundary information and mapping capabilities
- WordPress real estate themes that are search-engine enhanced to optimize content and Google and Bing rankings
- WordPress real estate plug-ins to add super features to any real estate website
- MLS API services and feeds that are fast, accurate and updated regularly to provide the latest listing info
- SEO services to help improve free organic rankings for targeted keywords
It costs nothing to speak with one of our experts. The phone number is 858-777-9533.
But that call to learn the latest advances in real estate technology could just be the difference that gives your firm a competitive edge in 2019, and puts you in a great position for the rebound predicted to come.