Why 2019 will be the year of the first-time homebuyer
Windermere Real Estate’s Chief Economist, Matthew Gardner, gives his predictions for 2019
BY MATTHEW GARDNER
National Housing Market
What a year it has been for both for the U.S. economy and the national housing market. After years of above-average economic and home price growth, 2018 marked the start of a slowdown in the residential real estate market.
As the year comes to a close, it’s time to dust off the crystal ball to see what we can expect in 2019.
The U.S. economy
Despite the turbulence that the ongoing trade wars with China are causing, I still expect the U.S. economy to have one more year of relatively solid growth.
Cyclical downturn will not be driven by housing. Although it is almost impossible to predict,” I believe it will likely be caused by one of the following three things:
- An ongoing trade war
- The Federal Reserve raising interest rates too quickly
- Excessive corporate debt levels
We still have another year of solid growth ahead of us, so I think it’s more important to focus on 2019 for now.
There are still voices out there that suggest the housing market is headed for calamity and that another housing bubble is forming.
Credit quality for new mortgage holders remains very high, and the median down payment is at its highest level since 2004.
Resurgence of first-time homebuyers
Finally, if there is a big story for 2019, I believe it will be the ongoing resurgence of first-time buyers. Buyers face challenges regarding student debt and the ability to save for a down payment. They are definitely on the comeback and likely to purchase more homes next year than any other buyer demographic.
Matthew Gardner is the Chief Economist for Windermere Real Estate, the second largest regional real estate company in the nation.