We have been in a seller’s market experiencing year over year rising home prices for a few years now. Buyers have been fighting bidding wars, inventory shortages, and ever-escalating home values looking ahead for the shift and softening of the market. Looking at market trends, we are predicting that 2019 may be that year.
Although the Fenton, Michigan area has seen median prices continue to steadily rise, throughout Michigan we have been experiencing a shift in pricing and demand in the last few months of 2018 that are giving us a bit of a nod toward what we will see in 2019. Although home prices are not exactly plummeting, and we are still at 7% growth over last year, we can see that they are trending lower than expected YTD.
One of the main reasons causing the scales to tip home values back is rising mortgage interest rates. We have seen a slight increase in rates this year, making things slightly less affordable than they were a few months ago.
When buyers and lenders are evaluating the affordability of a home and spending power, the more expensive it is for buyers to secure a loan, the less money buyers have to secure their property. ‘Rates were up 0.82% year over year to reach 4.65% on 30-year, fixed-rate mortgages as of Sept. 20, according to Freddie Mac. And each percentage point uptick adds about $143 to the monthly payments—and nearly $51,500 over the life of a loan—on a median-priced home of $300,000. (That’s assuming a 20% down payment.)’ according to Realtor.com.
If you are in the market looking to buy or sell a home, the fall is the perfect time to work with your Real Estate professional to plan for the spring market. Call us today to see how these changes make affect your 2019 planning.
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