The 4 Biggest Homeowning Trends of 2019!
It’s time to look back at what it was like to own a home in 2019. The biggest trend was the biggest surprise to many experts, who predicted back in January the cost of borrowing money to finance a house would rise. Instead …
1. Mortgage interest rates fell
The biggest housing news in 2019 was the fall in interest rates. At the beginning of the year, many experts predicted rates would hold steady or rise. For instance, Freddie Mac forecasted interest rates would average 4.7% in 2019.
Instead the average interest for a conventional 30-year fixed rate mortgage got as low as 3.49% on September 5, according to Freddie Mac. And average rates were at 3.68% in their mortgage survey released on November 27.
These rates led to a refinancing boom with homeowners taking advantage of substantially lower rates to reduce their monthly payments or save money on interest. Lower mortgage rates also helped support sales of new and existing homes in 2019.
2. Average home prices continued to rise
Across the United States, home prices keep going up. CoreLogic found that prices rose between 3.2% and 3.5% year over year through the middle of 2019, with the largest increases coming from modestly priced homes (those 75% or more below median). CoreLogic’s Home Price Index (HPI) has been rising steadily for over 7 years and is up 62% since March 2011.
This is good news for homeowners because rising prices often increase the value of home equity. Keep in mind housing prices vary by community and local trends may be different than national averages.
3. Affordable homes were still hard to find
2019 was a challenging year for moderately-priced home buyers, with home values rising and a lack of affordable homes on the market. New construction usually isn’t an affordable home buying option either. According to Rob Dietz, chief economist at the National Association of Home Builders, only 10% of newly built homes in 2019 cost less than $200,000.
4. More Millennials bought homes
Millennials are now the number one homebuying generation in the United States! According to realtor.com, Millennials were responsible for 46% of all home loan originations in the third quarter of 2019. The median purchase price of the houses they bought was around $230,000, which was lower than the median price of houses bought by Baby Boomers and Generation X.
On average, Millennials have waited longer to buy their first home compared to other generations according to a 2018 report from the Urban Institute. High levels of student debt are one reason for waiting. Millennials often get married and have children later than previous generations. Marriage and starting a family both make people more likely to buy a home.