Prediction for 2019 shows the real estate housing market in the U.S will be moderately cold.

Indeed ’s mean the real estate investment behavior for home buyers and . , will be neither warm nor cold.

Because according to some data this year of 2019. Our predictions revealed the housing market could be one the coolest year.

Either for real estate professionals, home and first-time home buyers.

This cold breeze in the housing market could be as something we’ve seen in the past years. But, homeownership, after all, will to rise along the subsequent months.

So far we predict eventually the real estate market will moderately cold during the first and the second trimester of 2019.

Nevertheless, After this year the housing market one time will take off. Inventory will rise back up to 2017 levels, and price growth.

Meanwhile likely still positive, will be the lowest we’ve seen since 2014 or possibly even 2011.

However, Investors and house-flippers will back away the cooling market. While, real estate companies that buy homes to sell at a profit will face their first serious test.

Tech companies and local governments will to go head to head on local housing issues.

Prediction #1: The housing market will to cool

Over the first half of 2019, home-price growth will stay slow. Our forecasts have price growth settling around 3 percent, which would be the slowest price growth we’ve seen in years.

As recently as the first half of this year, prices were still growing 7 percent, and price growth has reliably exceeded 5% since the start of 2015.

There’s quite a bit of uncertainty around our price forecast; there a real chance prices could fall 2018 levels, putting up negative growth for the first time since 2011.

will have to adjust their price expectations as buyers grapple rising rates and already-high home prices.

Metros that saw the price growth in the first half of 2018 will experience the slowdowns in price growth in the first half of 2019.

Seattle, San Francisco, San Jose, Portland, San Diego, Los Angeles, Denver, and Honolulu are a few of the metros where we demand to cool the .

“A few weeks ago I helped my home-buying customers get a bid accepted that would have gone straight to the bottom of a pile of offers earlier this year,” said Francisco Redfin agent Anna Coles.

“The offer for a house in desirable Parkside list price and included a financing contingency, which allows the buyers to back out of the contract without forfeiting their earnest money deposit on the off-chance their doesn’t get approved.

The norm for the past two-plus years had been that buyers had to waive standard protections like this in order for a seller to consider their offer, but this just one sign that buyers may face less competition heading into 2019.”

On the flip side, we home prices to continue to grow at a strong pace in a handful of small, affordable, inland markets like Buffalo, Rochester, and Greensboro, where the market still heating up.

We’re going into 2019 a 5 percent greater supply of homes for sale than we had to go into 2018, which is the highest growth we’ve seen since September 2015. But home sales were down 8 percent since last year in November.

A still-growing economy and increased access to credit will support home buyer demand, but higher interest rates will home-buying expensive, so it’s hard to say whether home sales will down or rebound next year.

Prediction #2: Homeownership rates will continue to rise

Whether total home sales go up or down, homes will be sold to people plan to live in the home as opposed to investors, which will cause the homeownership rate to rise.

Indeed, during 2019, homebuyers will enjoy more inventory and less competition speculators and house-flippers, which will lead to more people enjoying the benefits of homeownership.

Homeownership consistently growing its post-recession valley of 63 percent in 2016 to above 64 percent this year. We predict the homeownership rate will grow more rapidly in 2019.

Prediction #3: It will more to borrow, but more people will have access to credit for home-buying

Homebuyers have already seen mortgage interest rates increase in 2018, and the Fed’s most recent comments indicate that it will continue to raise rates twice or more in 2019, which will push the average 30-year fixed rate up to 5.5 percent by the end of the .

This increase from the sub-5 percent where rates hovering in recent months would mean a $100 increase in monthly mortgage payments on a $300,000 home by the end of 2019.

will also feel the effects of rising rates, which will increase their costs of lending and dampen demand for their services.

This will motivate to expand their customer base to low-income borrowers and first-time homebuyers. But of course, will charge more for these –both to cover the of lending to borrowers less-than-perfect credit and to cover their own costs of borrowing.

Prediction #4: A cooling housing market will dampen economic growth only slightly

In 2018, economic growth the strongest it since early 2015. However, residential investment, which includes money spent on construction, , and real estate commissions, and typically makes up 15 to 18 percent of economic activity, declined slightly in 2018.

For 2019, the economy will most likely grow, but a cooler housing market will less to the overall economy. Even if residential investment were to fall by 10 percent.

An atypical situation which has only happened three in the last 40 years, total economic activity would be impacted by 1 to 2 percent. That isn’t enough to cause a recession as long as the rest of the economy keeps growing.

From that perspective, there could be some spillovers from the cooldown in the housing market to spending.

Moreover, when homeowners see homes sitting on the market longer and sellers dropping their prices, feel less wealthy. Rising interest rates will also impact more than just home sales.

Meanwhile, it will be more expensive to finance a , take on credit card debt, or refinance a to take out equity, which will also weaken spending.

Prediction #5: Fewer homes will be built, but more builders will focus on starter homes

In 2019, homebuilders will be more cautious about building during a cooling market and focus on building starter homes that are easier to sell than luxury homes.

We have already seen the per-unit value of single-family residential building permits flatten, and we predict per-unit values of building permits will decline in 2019.

Another factor in 2019 will be low unemployment, which will finally cause wages to rise for low-income workers. This will impact both the supply of and demand for housing.

On the supply side, higher labor costs will limit the number of homes built. Meanwhile, higher wages will be a boon to demand starter-homes among working-class Americans.

“When we decided to plan our first new construction development, we found a niche in the $250,000 price range in Dallas, where there is a great deal of activity among national and local builders.

Because almost all of it focused on the high end,” said Pushban Rajaiyan, the lead on Brentwood Court by Havendale Homes, a townhome community now available for pre-.

“It important to us to offer homes built with high-quality materials but for an affordable price and in an area where residents can enjoy nearby amenities and commutes.

Just in the past few months, we’ve already begun to see other builders catch on to this unmet need in the market, with other affordable, starter-home options coming available to local buyers soon.”

Prediction #6: Institutional buying faces its first serious test

Nevertheless, if home-buying demand falters due to higher interest rates and stock-market volatility. Meanwhile, the trend toward instant offers from institutional homebuyers could face its first serious test, a test of pricing algorithms as much as companies’ appetite for .

Armed with billions in capital, competitors from Open door to RedfinNow to Zillow to Offroad to Knock vying with one another to buy homes from and sell those properties at a profit, with i-buyers’ combined of U.S. home sales growing rapidly.

The question investors are asking is whether instant offers will now be significantly lower, to compensate institutional buyers for the market’s recent uncertainty and whether homeowners will accept the offers, just to avoid those same uncertainties themselves.

Institutional buyers made money from nearly every in a rising market with low-interest rates could start to face losses, or may demonstrate more discipline than other housing investors. In 2019, we’ll find out.

If i-buying works in a bear market as well as it has in a bull market, instant offers could become a major, permanent sector within the real estate economy. If it doesn’t, of money is going to sink into the sand.

Prediction #7: Tech and local government will go head-to-head on housing

As we know, cities struggling with the double-edged sword of tech-company-driven prosperity and inequality.

Tech companies bring highly skilled workers to cities and them handsomely.

This is why 238 cities vied for Amazon’s HQ2. But, shortly after the HQ2s were announced, residents of Long Island City began protesting, advocating for more housing investment to avoid displacing existing residents.

Crystal City has planned ahead with 4,000 new housing units, but Amazon plans to hire 25,000 people there. Growing cities will have to start building more housing now if don’t want to face the affordability.

At the same time, homelessness problems that established tech hubs like Seattle and Francisco are currently facing.

This article reflects the beliefs of our blogging team about the overall housing market. If you would like to find out which of our predictions in this article come true, and which predictions turn out to be incorrect, visit our real estate page