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Last year Americans were purchasing new houses, and the market started very hot and started to cool off as the year progressed. With the current economic climate, the housing market could continue to cool off. Whether you are planning on buying or selling this year, here are some of the real estate trends you need to pay attention to!

Rising Home Prices

Home prices have jumped 10% in the last two years. Home prices are estimated to rise again in 2019, but the pace should be much slower. The slower pace will also mean that there will be more homes for sale and could cause the market to be stagnant. With mortgage interest rates continuing to rise and the uncertainty of the economic climate, those two trends could discourage anyone who’s on the fence about buying a house.  Similarly, current home owners that availed themselves of incredibly low interest rates during the downturn will remain in their home as long as possible and will avoid moving up in home.

Higher Mortgage Interest Rates

Interest rates have not been this high in seven years. To help stabilize the economy and help with rising inflation, the Federal Reserve has started to increase short-term interest rates. This means that home buyers are willing to spend and borrow more and the market will continue to adjust to these changes. Houses could potentially sit on the market longer than usual and receive fewer offers because of this trend.

Millennial Home Buyers

Millennials have established themselves in the job force and are now focusing on buying property and settling down in middle and upper-middle class neighborhoods. Millennial home buyers are doing their research before meeting with a realtor and are looking to be in prime locations, live a  low-maintenance lifestyle and purchase better quality housing.

While these trends are important for individuals who are looking to buy or sell their homes this year, it is also important to know what to do if you are not planning on buying or selling within the next year.

Increased Home Equity

Home equity will continue to rise 2-6% over the next couple of years and follow the rise of housing prices. This is great news for sellers when they go to sell their house. They will see an increased profit in their sale.  For landlords, it provides for capital gains in addition to rental income which are treated more favorably under current tax codes.

No Projected Crash

Rising mortgage rates would make eventual homebuyers leery that the housing market could potentially collapse, but a variety of factors indicate that the potential of a crash will not happen any time soon. As long as the economy stays strong, the housing market should continue to prosper.