The predictions made for 2018 were not all accurate. In fact, contrary to many of last year’s estimates, the real estate market has remained strong for home sellers through to 2019. Let’s take a look at what is going on in the housing market this January, 2019.
- Despite previous reports that interest rates were going to continue to increase through 2019, they have actually experienced a decline in the past week. According to Freddie Mac, home buyers mortgage rates are averaging 3.87% for a five-year adjustable-rate home loan and 4.45% for a conventional 3-year loan at a fixed rate.
- On a negative note, the numbers are in for December 2018 and home sales plunged 6.4% according to the National Association of Realtors. This is drastic since, regardless the direction, home sales usually only shift in very low digits month to month. According to Lawrence Yun, chief economist for the Realtors, “The latest decline is harder to explain. Perhaps it is the decline in consumer confidence that’s been occurring in the latter half of 2018.” He continues, “The latest numbers do not reflect the lower, current mortgage rates comparted to the November figures, so it’s really harder to explain.”
- Real estate experts and economists are projecting that in 2019 the housing market will continue to slow down. Home developers have reduced their amount of construction planned for 2019 due to the high number of homes that are currently available on the market. In Baytown alone, there are over seven hundred homes listed for sale (as of January 2019). However, this should not be a deterrent to individuals interested in selling – they can sell to an all-cash homebuyer. The benefit of selling to an investor is that the competition does not necessarily impact the sale. For example, we here at Gulf State Homebuyers provide competitive offers despite the high number of homes available on the market.
- More on Baytown: Home prices in Baytown over the last thirty days have averaged $185,000, which is up 2.4% compared to January 2018. This is above the median home value in Baytown, which averages $147,400. In the last year home values have risen 5%, creating opportunity for potential sellers.
The Impact of the Government Shutdown
According to the numbers, it is an optimal time for a homeowner to sell. Home selling prices are still competitive and interest rates are still lower compared to anticipated predictions. However, there is one major event that is negatively impacting the housing market – the government shutdown.
Due to the shutdown lenders are having to make a challenging decision related to providing clients with new loans. When an application is submitted to the lender, they generally verify income through the Internal Revenue Service (IRS) or Social Security Administration. However, both these agencies are experiencing delayed response times to lending inquiries. Due to lack of funding, the agencies are behind on work. Therefore, lenders are having to decide whether they want to provide loans without this critical informational. Unfortunately for home buyers and home sellers, this is causing lenders to withdraw certain loans that may seem too risky. Additionally, this does not include buyers who are seeking FHA or VA loans. These loans are underwritten by both of the identified agencies, so with limited assistance, approval time on these loans is longer than usual.
Moreover, home buyers with either the capital at hand or those that have been approved by a loan are somewhat hesitant to finalize purchases on new homes during the government shutdown. A recent study completed by the National Association of Realtors found that 25% of buyers are backing out due to their fear of government uncertainty.
The continuation of the government shutdown is making the real estate market (and the United States economy) unstable. Depending on the length of the shutdown, interest rates could fluctuate, and, with all of the missing government assistance, many home buyers are limited in their ability to execute on a deal.
How to Take Advantage of the Market, But Avoid the Complications with the Shutdown
Remove the finance contingency on your home sale. Just because the government is shut down, it does not mean you need to hold off on selling your home. With an uncertain forecast for the real estate market, now is the best time to pull the trigger on your sale. Sidestep the finance contingency and sell to us – all-cash home buyers. We have the capital available to close on your home within five days.
If you are interested in taking advantage of the current market and selling your home, contact us today.