Housing expert James Stack has a solid track record for predicting what will happen in the market, and his prognosis for 2019 is not good.
“Housing could be heading for its worst year since the last housing crash,” he said in an interview with Bloomberg. “Expect home sales to continue on a downward trend in the next 12-plus months.”
The housing market slowed noticeably last year, as mortgage rates hit a seven-year high. Experts said sellers may need to lower their prices if financing for buyers continues to get more expensive. A recent report in Redfin found the supply of homes in the U.S. would be 5 percent higher going into 2019 than it was at the same time the year before. Homebuilders, whose confidence in the market is at a two-year low, will focus on starter homes, which continues to experience demand.
Stack previously predicted the real estate crash in 2008 and the housing slowdown last year, warning last January that increasing mortgage rates would expose the market’s affordability problem.
He said it is too early to tell if the housing market has found itself in another bubble. Rates for 30-year mortgages have fallen to 4.51 percent since peaking at 4.94 percent in the fall, but the damage has already been done, according to Stack.
“Homebuyers have woken up to the fact that affordability is a major issue,” he said. “Can they afford the home?” [Bloomberg] – Eddie Small