February 8th, 2019 11:26 AM by Eric Fang
Every year, several experts take a look at the housing market to determine whether sales will rise or fall. Last year, insiders expected that the updated tax code would cause home sales to slow, but so far, this prediction hasn't come to pass. While the housing market was dampened somewhat in 2018, the culprit was an increase in mortgage rates and housing prices, not the new tax law. Home sales have been somewhat flat so far in 2019 as well, for several different reasons, such as global trading conflicts and volatility in the stock market. While it's too soon to tell whether these economic conditions will continue to interfere with home sales, experts are starting to make some predictions for the housing market in 2019. According to the National Association of Realtors (NAR), the housing market in 2019 should be relatively stable, especially when considering home values. While the price of homes will still appreciate, a lack of inventory is an issue that may flatten the rate of home sales. The fear is the lack of new home inventory, particularly when taking into account job and population growth in certain markets. Some experts are actually predicting a decrease in home sales. The reason that home sales may decline mostly has to do with affordability. As home prices and mortgage rates increase, buying a home becomes less affordable. Unless a big economic change occurs in the future, Realtor.com predicts that it will remain a seller's market for at least the next five years. The National Association of Home Builders (NAHB) is also somewhat pessimistic for the housing market in 2019, mostly due to a sharp drop in home builder confidence at the end of last year. The NAHB predicts that several factors could impact home sales in the coming year. First, the market faces a shortage of labor and lots suitable for building, which translates to less construction of new homes. Second, strict building regulations and building practices may also reduce successful home sales. Finally, costs for lumber and other supplies have increased for many home builders because of tariffs. As a result of these different factors, the NAHB predicts that sales for new homes should be about the same as last year, although the group also expects construction of single-family homes to increase slightly.