Economists are sounding more upbeat toward the housing market this year. Realtor.com® has revised its 2019 housing forecast, reflecting optimism for a much stronger market. Lower mortgage rates are mostly behind the shifts in attitude.
Realtor.com® economists are projecting mortgage rates to average 4.5 percent by the end of the year—nearly a percentage point lower than they originally forecasted. The lower mortgage rates are increasing buyers’ purchasing power, despite a continued uptick in home prices.
“The 2019 housing market is different than what we predicted in fall 2018, primarily due to an unexpected drop in mortgage rates in January 2019,” says Danielle Hale, realtor.com®’s chief economist. “We believe 2019 will be characterized by lower, but still increasing, mortgage rates that will buoy home prices and sales by boosting buyers’ purchasing power beyond what we initially projected. This will create a slightly hotter, but still cooling housing market relative to the initial forecast five months ago.”