Forecasting a Modest Year for Housing in 2019
Forecasting a Modest Year for Housing in 2019.
We continue to forecast a modest year for housing in 2019, which should benefit from a slightly stronger economy and lower mortgage rates than we originally forecast.
We continue to forecast a modest year for housing in 2019, which should benefit from a slightly stronger economy and lower mortgage rates than we originally forecast. Our new assumptions are:
- 1.2% job growth, up from 1.0% and less optimistic than consensus of 1.5%
- 4.0% average 30-year mortgage rate, down from 4.3% and more optimistic than 4.1% consensus Because the decline in mortgage rates is largely driven by fears of an economic slowdown, we have even more conviction that our forecasted modest 2021 recession (0.4% job loss) is the most likely scenario for managing your business.
On page 14, we show the views of 10 highly respected economic forecasts or surveys.
Page 53 is the beginning of 20 pages of informative charts on forecast risks. We revised our forecasts this month, and for 2019 we now expect:
- Flat housing starts, unchanged from last month
- +2% new home sales, up from 0% growth and resulting in less unsold inventory
- -1% multifamily permits, better than -3%
- -4% fewer resale sales, better than -7% and slightly below consensus
- +3% resale price appreciation (up from 2%)
- +1% new home price appreciation (unchanged and lower than resale appreciation due to new home competition and a higher than usual new home premium that is slowly returning to normal, as noted on page 288)
Looking for a private loan for new construction or real estate development in the Midwest (Colorado, Utah, Texas, Wyoming)? Contact Broadmark Real Estate Management today for a quote.