Mortgage rates will continue to rise
Despite climbing for the past two years, mortgage rates still remain historically low. There are many factors that affect rates beyond just the Fed rate. Expect rates to continue to bounce around but trend towards 5% or possibly higher.
Millennials will buy more homes
The largest segment of millennials, people born between 1982-2004, will be turning 29 next year, entering peak household formation and home-buying age. In Arlington, most single family homes are out of reach and thus condos will be a popular choice for these first time buyers.
Millennials continue to make up the largest segment of buyers, accounting for almost half of new mortgages compared to 17% of Boomers and 37% of Gen Xer’s.
Inventory will remain tight
The housing inventory has remained tight for the past several years and will continue to remain tight. There have not been enough new construction to keep up with demand in this area and that will only compound the problem.
Prices will remain steady
Many economists are predicting a housing slow down in 2019 and that may be true for the national outlook. However, in Arlington, there is still too much demand for the limited inventory and that will help sustain prices. I would expect a small appreciation overall.
Amazon will have a positive affect
Amazon coming to Arlington will have a positive affect on the housing market, but not as much as some think it will. In 2019, Amazon only expects to hire 400 people and in 2020, about 1,100. And many of those hires will already live in the area.
The Government shutdown will slow the market
The Government shutdown will slow the market if it lingers for a while. Government employees that are furloughed will be in a tough position without a paycheck. Any borrowers using certain government loan programs, like USDA, may be impacted. On the other hand, FHA or VA may not see any delays.
2019 will be an interesting year for sure with a couple of wildcards in the mix. The Mueller investigation will come to fruition, a Democratic congress takes charge in January and of course Trump is always unpredictable. Buckle up. It’s going to be a fun ride!