From 2018 to the beginning of 2019, the U.S. housing market slowdown has been a cause for concern. According to a Black Knight Mortgage Monitor January 2019 report, this trend is expected to continue for a while. However, others believe that they will soon see the light at the end of the tunnel. Depending on your view of the prism, the economic outlook for the industry is either grim or very positive. However, the evidence is all in the statistics.
There Has Been a Steady Decline in Home Prices in Recent Months
The Black Knight Data & Analytics division reported that home prices fell by 0.3% in December 2018. This was the fourth decline in four consecutive months. This means that the average price of a home has decreased by more than $2,400 since August 2018. This fall in the appreciation rate marked the beginning of the housing market slowdown.
The 30-Year Fixed Rate Mortgage Is at Its Lowest
The 30-year fixed rate mortgage has also dropped to 4.31% earlier this month. This decrease marks the lowest recorded rate in over a year. As a result of the decrease, homebuyers now need to make a down payment of 20%. This is lower than the 25% that lasted through the late 1990s and early 2000s. Additionally, homebuyers will use an average of 22.2% of their income to buy a home. The figure was 23.4%, a few months earlier.
Home Sales Are Expected to Increase in the near Future
There was a 1.2% decrease in home sales between December and January. Despite the housing market slowdown, the expectation is that home sales will increase. The lower prices and the drop in the interest rate have made homes more affordable. They have also increased buyers’ purchasing power by at least 6%. Reports also showed that there have been significant increases in housing completions and new home construction. This is a definite plus for homebuyers!
If these trends continue, the housing market slowdown will soon take a 180-degree turn. A positive economic outlook will give homebuyers something to anticipate.