The outlook of the real estate market in New Hampshire in 2018 was more less the same as the previous year. However, the sale of single-family homes dropped with a just a slight 1.5% from the year 2017. Despite that, realtors in the state are confident that the real estate market is healthy and kicking. So what should we expect in 2019?
Mortgages under siege
One of the anticipated challenges in the real estate market is the increasing interest rates in mortgages. Long are gone the days when interest rates were at a friendly 4% and sooner or later 5% shall be the norm. Interest rates averaged at 4.75% at the start of the year with the rate expected to crop 5% and above by end year. This might discourage many people from investing in mortgages.
Low unemployment rates to drive up the market
Unemployment rate was at its lowest in 2018 – 2.6%. The rate could get lower in the coming years as this has been the trend since 2009. Low unemployment in 2019, which has also coincided with rising wages, means an increase in household income. As such, more people will invest in the real estate industry and buy homes.
Strong demand but weak supply
An expected strong demand for housing in New Hampshire should be good news to realtors. But it isn’t something to rejoice over yet. While the demand is high, the supply of affordable houses is still low. According to New Hampshire Association of Realtors, home purchases declined by a 6.8% in the Northeast and 11.2% in the Midwest. Reduced purchase demand is attributed to limited new housing units, increased purchase price and rising interest rates. In 2009, there will be more renters and fewer home owners.
Smaller homes becoming more prevalent
First-time homeowners prefer smaller homes rather than the larger ones. This is for the obvious reason that a smaller home is cheaper and interest would be small in the case of a mortgage. Additionally, there are smaller homes up for grabs than the large, luxurious homes. This is due to a number of impediments in housing development including limited construction land, high interest rates on loans and unavailability of workforce.
With the demand in real estate still robust, 2019 is going to be a good year. On the flip side of climbing rates and purchase prices, more people might be compelled to buy quickly before the rates escalate further. The market trends in the real estate industry won’t change much from last year but will remain steady.