2019 Recap: Revisiting Five Questions From One Year Ago
At the beginning of 2019, we posed five questions that we felt were going to be important in the coming year. Now that 2019 is drawing to a close, let’s revisit those questions and see if we found the answers:
1. “What will the interest rates do?...” In the beginning 2019, the interest rate on a 30-year fixed was 4.51 percent, according to Freddie Mac. Many experts predicted rates would rise well over 5.0 percent during 2019, but, as often is the case, the rates surprised us. In May, they dropped below the 4.0 percent mark and stayed there—nearing historical lows—throughout the rest of the year. This is in stark contrast to the 5.0 percent rates many experts foretold.
2. “Will the economy continue to grow?...” After two years of steady growth, many economists warned of a possible “softening” of the U.S. economy at some point in 2019. Although many metrics are still growing at a healthy clip, fears of a recession did crop up in 2019 and the pace of economic expansion has slowed somewhat. However, any softening in the economy did not have much of an impact the housing market, which may have been due to the favorable interest rate environment.
3. “Will home sales rebound?...” According to figures from the National Association of Realtors, 2018 saw a drop of 3.09 percent in existing home sales as compared to 2017. In contrast, through October of 2019, year-over-year figures show a 3.8 percent increase in sales of existing homes. Sales in the beginning of the year were somewhat flat, but the second half of 2019 showed improved growth, with October having a 4.6 percent increase.
4. “Will home prices continue to rise?...” As has seemingly been the case every year, the question wasn’t so much if prices would continue to rise, but rather how much they’d rise. At the start of 2019, most experts predicted a modest increase, somewhere between 2 and 4 percent. According to property data firm CoreLogic, home prices were up 3.5 percent in 2019 (through October), which is mostly in line with predictions, although that percentage was at the higher end of many forecasts.
5. “What will the overall market conditions be like?...” In 2018, we saw a slowdown of the housing market due in part to an increase in home prices, low housing inventory and a rise in interest rates. The 2019 market also experienced a slowdown due in part to higher prices and limited inventory—but without the high interest rates. Fortunately, the interest rates played an integral part in keeping the housing market afloat.
Keep in mind that economic and market conditions can vary by location, so consult with your real estate and mortgage professional to get the best information about your particular area.
For more than 25 years, Omega Financial has been serving mortgage clients in Massachusetts. Our brokers have approximately 50 years in the mortgage business. You always will receive fast, courteous, and accurate information. Omega Financial, Inc. is a company duly licensed to operate in Massachusetts as a Mortgage Brokerage. We are located in the Town of Norwood, Massachusetts where we have been operating as Omega Financial Incorporated since 1988.
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