REALTORS® Home Price Outlook Improves as Mortgage Rates Decline
About 3,000 REALTORS® who responded to NAR’s February 2019 EALTORS® Confidence Index Survey had more optimistic— although modest— home price growth expectations over the next 12 months. Respondents expect home prices to typically increase by 1.9 percent nationally, up from 1.4 percent in the January survey. NAR forecasts a 2.7 percent appreciation in the median existing homes sales price in 2019 (as of April 2019 outlook).
Based on responses received in the December 2018 through February 2019 surveys, REALTOR® respondents from Idaho and Alabama held the most optimistic outlook, with prices expected to increase by more than three percent to five percent over the next 12 months.
Respondents from Washington, Nevada, Utah, Arizona, Wyoming, Colorado, Oklahoma, South Dakota, Minnesota, Wisconsin, Indiana, Tennessee, Pennsylvania, Virginia, North Carolina, Tennessee, and Georgia expected prices to typically increase by more than two percent to three percent.
Respondents from states such as California, Texas, Illinois, New York, and Massachusetts held the most conservative price growth outlook, with prices expected to increase by no more than two percent.
Amid the decline in mortgage rates starting in December 2018, the median price of existing homes ticked up slightly in February 2019, to $249,500, from January’s $249,300. Home prices tend to increase seasonally in February compared to January but the higher year-on-year price appreciation of 3.6 percent in February 2019 from the 3.5 percent year-on-year price appreciation in January 2019 indicates the slowdown in home price appreciation may have turned a corner. The downtrend in interest rates will support this firming up in prices.
Across metro areas, the median list price of properties listed on Realtor.com rose in February 2019 has increased in many California metro areas compared to January 2019, though prices are still lower from one year ago: San Jose-Sunnyvale-Sta. Clara (8% m/m; -10% y/y), San Francisco-Oakland-Hayward (6% m/m; -1% y/y); Napa Valley (1.4% m/m; 6% y/y), Los Angeles-Long Beach-Anaheim (2.1% m/m; -1.3% y/y)) and San Diego-Carlsbad (1.4% m/m; -2.3% y/y).