Zillow is predicting the 30-year fixed mortgage will be at 5.8 percent by the end of next year, the highest level since the Great Recession. This will spur many potential homebuyers to reconsider renting, which will fuel a new increase in rent appreciation as demand for this housing sector grows.
Next year will also see home prices growing by 3.79 percent in 2019, according to a Zillow survey of more than 100 housing experts and economists. And more residential properties will be destroyed as the frequency and magnitude of natural disasters intensifies over time.
"The central storylines in the U.S. housing market didn't change much over the past few years, but a series of emerging trends are setting up a much different narrative for 2019," said Zillow Senior Economist Aaron Terrazas. "Certain headwinds–including rising mortgage interest rates, higher rents and stiff competition for housing in the most desirable areas–will only grow stronger over the next year, but that won't necessarily be a bad thing. A slower-moving market is likely to give more buyers a chance to catch their breath and choose from a wider selection of homes that fit their preferences and budgets.”