Let’s look at predictions about home prices, home sales volumes and mortgage rates for 2019 – 2020 from a variety of different sources.
Beginning with home prices, CoreLogic reported that home prices rose +2.8% to a median price of $247,500 nationwide in 2018. Despite prices of detached homes falling $9,400 from 2017 and the National Association of REALTORS® (NAR) reporting that sales prices dropped $3,700 to $253,000 from November 2018, December 2018 saw the 82nd straight month of home price increases.
NAR indicated that the real story in 2018 home prices was the price drop in lower priced homes. Take a look:
- $50,000 – $100,000 homes dropped -14.8% in price
- $100,000 – $250.000 homes dropped -9.7% in price
- $250,000 – $500,000 homes dropped -3.2% in price
- $500,000 – $750,000 homes dropped -5.3%
- $750,000 – $1M homes dropped -1.7% in price
- $1M + homes dropped -3.2% in price
All that being said, CoreLogic predicts that home prices will rise +5% in the next nine months.
Home sales volumes in 2018, according to CoreLogic, dropped -8.5% compared with 2017. This is the lowest home sales volume since 2015. NAR reported that home sales volume nationwide fell -6.4% in December 2018. NAR also reported that sales volume in the Midwest dropped -11.2% in December 2018, sales volume in the West fell only -12.9% and that sales volume in the Northeast climbed +8.2% over last year.
Significantly, NAR reported that single-family home sales dropped nationwide -10.1% nationwide and -14,1% in the West. Condominium and co-op sales dropped 80,000 units though condo/co-op sales volume in the South saw an increase of +4%.
NAR predicts that, despite sales slowing in 2019 – 2020, “house hungry” middle class Millennials and powerful economic performances will outweigh “housing crash” indicators.
The Mortgage Rate Forecast from Longforecast.com looks like this for 2019 – 2020:
- April 2019 – 3.74
- June 2019 – 3.87
- August 2019 – 4.10
- October 2019 – 4.19
- December 2019 – 4.15
- February 2020 – 4.35
- April 2020 – 4.46
- June 2020 – 4.84
- August 2020 – 5.09
- October 2020 – 5.08
- December 2020 – 5.13
* These predictions may change due to the Fed’s latest statements about keeping rates stable for the remainder of 2019!!!
What’s Ahead?
CoreLogic predicts that home prices will rise +5% in 2019 and that the average monthly mortgage payment could rise from last fall’s $912/month to $994/month by the end of 2019.
Zillow predicts that the average price of an existing home at $222,000 could rise +$12,000 or +6.4% by late 2019.
Experts agree that the most expensive cities to buy a home will be San Jose, San Francisco, Los Angeles and San Diego in 2019 – 2020. They agree that the most positive equity cities will be San Jose, Honolulu and San Francisco. And they agree that the most negative equity cities will be Chicago, Las Vegas, Virginia Beach, Baltimore and Memphis.
