For those expecting a rough homebuying season, there’s reason to remain hopeful. Realtor.com on Tuesday issued a revised forecast projecting a more robust market than originally predicted through the remainder of the year.
As mortgage rates fall and more homes hit the market, realtor.com has updated its homebuying forecast for the end of 2019. While the original forecast predicted mortgage rates to reach 5.5 percent by the end of the year, the adjusted forecast indicates rates will likely peak at 4.5 percent. The number of home sales, meanwhile, will experience a much smaller drop than initially forecasted. Realtor.com expects them to drop by only 0.3 percent instead of 2 percent.
“The 2019 housing market is different than what we predicted in fall 2018, primarily due to an unexpected drop in mortgage rates in January 2019,” said realtor.com Chief Economist Danielle Hale in a prepared statement.
Home prices are the only metric not predicted to experience a shift toward affordability. Realtor.com predicts prices will grow by 2.9 percent instead of the original 2.2 percent. But overall, the anticipated slowdown in sales is not likely to take place. With lower mortgage rates, more homes are expected to trade hands than originally predicted.
“We believe 2019 will be characterized by lower, but still increasing mortgage rates that will buoy home prices and sales by boosting buyers’ purchasing power beyond what we initially projected,” Hale said. “This will create a slightly hotter, but still cooling housing market relative to the initial forecast five months ago.”