Landlords can expect to see renters continuing to rent in the coming year as a new Harris Poll found 19 percent of current renters say rising mortgage rates are their biggest obstacle to buying now.
“Using insights from a new Trulia survey of more than 2,000 U.S. adults aged 18 and older, conducted online by The Harris Poll, and our housing research and analysis from the past year, we are making the following predictions about the U.S. housing market in 2019:”
- Nationwide housing inventory will remain tight
- Worsening affordability will slow down home buying activity
- Mortgage rates will continue to rise in 2019, reaching 10-year highs
- Expect natural disasters to impact more communities in 2019, but have a moderate effect on the housing market overall
- More millennials will become first-time homebuyers in 2019
“Rising mortgage rates will take a bite out of affordability on top of an already supply-constrained and high-priced housing market,” Trulia reports in their 2019 housing market outlook.
“Almost one in five (19 percent) renters who wish to buy said rising mortgage rates were their biggest obstacle to home buying – up from 13 percent in April, before rates hit seven-year highs,“the report says based on a Harris Poll in November.
Landlords can expect to see renters stay as renters
Mortgage rates on 30-year, fixed rate loans have been less than 5 percent since the end of the recession, helping to buoy housing demand and keep monthly payments relatively cheap even as prices themselves rose.
But those record-low rates will come to an end in 2019, according to the Trulia report.
Housing affordability issues will keep more people as renters
Trulia says the financial impediments of homeownership are acutely felt among renters who wish to buy:
- 53 percent of renters say that saving enough for a down payment is the number one obstacle to homeownership.
- 36 percent of renters say home prices is the obstacle.
Over the past several years, home price growth has largely outpaced income growth, making for an increasingly unaffordable home-buying environment. And next year, even as growth in home prices cools, limited supply will continue to help push prices up to some degree.
“Even if inventory begins to pick up in more markets, it will be rising from multi-year lows and will take a long while to get back to a more balanced level between buyers and sellers.
“With the construction industry facing significant headwinds from the higher cost of materials and labor as well as rising interest rates, we do not expect much if any growth in new construction starts in 2019 to help alleviate inventory woes,” Trulia says in the report.
This survey was conducted online within the United States by The Harris Poll on behalf of Trulia from November 7-9, 2018 among 2,021 U.S. adults ages 18 and older. This online survey is not based on a probability sample and therefore no estimate of theoretical sampling error can be calculated. For complete survey methodology for this survey or previous surveys, including weighting variables and subgroup sample sizes, please contact [email protected].