Last year the media warned consumers to reconsider purchasing a home in 2019. Predictions included that higher interest rates and the increased prices of homes would make it unaffordable. Ironically, for these exact reasons, homes may actually become more affordable throughout the rest of the year.
According to CNBC, by the start of 2019 asking prices started trending downward. While they are still higher than they were a year before, sellers began to compromise. As more buyers shy away from the market for the aforementioned reasons, more sellers hoped to coax them back with more affordable prices.
Last November, interest rates for a mortgage climbed to an average of 4.9%, the highest it has ever been since February 2011. Higher interest rates have a significant impact on the amount of money homeowners can afford to pay monthly, which in turn affects how much the bank will qualify them for.
A follow-up article by ABC Action News showed that while mortgage interest rates are still high, they dipped lower than they were in November of last year. As more buyers recover from cold feet and step into the market, the asking prices may gradually begin to rise again. However, because there are still enough houses versus the demand for them, buyers may still enjoy a buyer’s market for a while longer.
Experts also predict that the mortgage rates will remain low in comparison to the heights it reached in 2018. Mortgage rates peaked at 5.09% in November, but fell to 4.09% by June of this year. This could hold through until the end of the year. Despite these new developments, affordability still remains an issue, especially in urban areas.