hi this is Audrey Whittington with realtor.com and today we're gonna be
talking about economic insights and I'm pretty excited about today's topic. Because
we're gonna be talking about the 2019 forecast with Danielle Hale the chief
economist at realtor.com so Danielle, like everybody wants to know what do we
have to look forward to well it depends on whether you're a buyer or a seller
and whether or not you're looking forward to this year right so our 2019
forecast calls for a tougher road ahead for both buyers and sellers. It's not to
say that it's going to be impossible but there are factors that are going to make
2019 a little bit more difficult regardless of what side of the housing
market you're on so to dig into buyers for the for the first perspective buyers
have some bright spots we do expect more inventory and 2019 coming to market so
they will have more options to choose from however it's not going to be so
much inventory that we see a lot of price pressure.
Right
we see home prices
slowing so they will grow at about 2% pace instead of the 4 to 5% pace that
we've seen in sales prices recently so a slower pace of increase but they're
still increasing so buyers are still looking at more expensive housing
coupled with the fact that mortgage rates are rising so that's a trend we've
had for the past couple years and so we expect that to continue in 2019 mortgage
rates at the end of 2018 are going to finish the year right around 5% and we
expect them to finish next year around 5 1/2% so they'll be
about a half a percentage point higher those two factors combine price
increases and mortgage rate increases mean that we're looking at about 8%
more in the monthly payment so then you combine that with income growth
of around 2 to 3% things are gonna get a little bit more
expensive for buyers and that's that's why we say it's going to be tougher it's
not impossible but if you've been looking for a while it's not gonna get
easier on that front yet so they might start to feel a small squeeze but not a
lot I mean what I heard was about a 5% differential right which was so-so and
it seemed that mortgage rates have been pretty steady and I think the Fed just
came out and said that more they're actually gonna hold mortgage rates but
you're saying you put any think we'll see a bit of an increase next year yeah
so it's hard to interpret what the feds says. Some people didn't read chairman
Powell's comments recently as we're gonna wait and see and he did emphasize
that the Fed is being data dependent so they're looking at the data and how data
on the economy evolves and what that means for the rate path they've been in
this tightening cycle for the last couple years now and we expect it to
continue most forecasts had called for three to
four increases in the Fed rate the Fed Funds rate next year so 2019 we're
expecting two to three in line with continued growth in the economy but if
for some reason economic growth shows signs of starting to slow which it
hasn't yet but it could if it does then they might Ratchet back on their
expectations for if I had a bunch increase Fed Funds rate increases that
they're planning to do and so and he said you know we're closer to the
neutral range on the federal funds rate and earlier in the year in October I
think it was he had said something about you know we still are a couple steps
away from a neutral Fed Funds rate level so those two things are are consistent
he hasn't really changed his position but he has changed the focus of his
position that's caused some people to think well maybe they're gonna move
slower than they otherwise would have let's talk with the Fed Funds rate what
does that really mean how does that play in I think a lot of consumers don't
really understand what that is yeah so the Fed Funds rate is a short-term rate
that they set for overnight borrowing between banks and it has this cascading
effect of you know once the short-term rate is set at the rate that it's set
then that impacts long-term rates because you can create arbitrage
opportunities to make money basically you can loan the Fed money banks can on
a short-term basis and then lend it out to others and that basically cascades
all the way up the yield curve so mortgage rates are affected by those
short-term rate zones and affected by the same factors that drive those for
short-term rate trends so the overall strength of the economy but they're not
tied together in lockstep so mortgage rates you know most people take out a
mortgage for 30 years or we're setting right 15 or 30 years so long-term rates
and then they tend to stay in their homes for about 10 years so we see
mortgage rates tied very closely to the ten-year rate because I certainly
it's an English time horizon and a ten year rate is affected by these
short-term rates but also by the general outlook on the overall economy because
people are thinking about not just what's going on now but what's gonna
happen over the next ten years so that's why the Fed fund rate is sort of
important to the mortgage rates but so is the general economic outlook and I
think in terms of the general general economic outlook obviously it was a lot
of politics involved and and sort of where we are politically so how does a
buyer navigate all of that so they're on realtor.com and they're looking how do
they navigate and decide what to do for 2019 well they can do things like look
at our forecast yeah so they don't have to try to piece together their own
trends based on what they see in the market we've done that for you so by all
means look at our forecast we expect mortgage rates to continue to increase
based on the fact that we expect the economy to continue to improve in 2019
and so we'll go from about 5 and 1/2 or sorry a 5% rate at the end of 2018 to
roughly a five and a half percent rate to the end of 2019 so half a percentage
point increase it's not terrible but but rates are gonna get higher so if you're
thinking about this from the perspective of a buyer you want to think about how
you'll navigate this right so think about what you qualify for now in a home
I maybe test out what happens to your budget if mortgage rates do go to five
and a half percent so that you don't have to totally revamp your search you
already know what your budget limit is at that higher mortgage rate well let me
throw you a bit of a curveball okay so what about the tax bill how does the tax
bill affect the housing market he has in the tax bill and I know you're not a tax
expert so do the best you can here all right so the tax bill so it's not new it
passed at the end of 2017 right it's been in effect for all of 2018 and in
fact most people have probably already seen slightly higher take-home pay
because the IRS changed withholding to account for the new tax plan yep
but no one's actually filed their taxes under this new plan because probably
your taxes sometime between January February and April when they're due so
that's when it's really gonna hit home for a lot of homeowners and renters are
going to see exactly how much they benefit
or lose out from this tax plan you know we know that the tax plan had a couple
of changes that directly affect the way you know homeowners and renters are
going to do their taxes so for renters they didn't really have a lot of tax
benefits under the old tax plan so for most of them it's going to be a positive
they were less likely to itemize deductions because of the structure in
the old tax plan and should be more like so they should benefit from the higher
standard deduction so it's good to know for homeowners they were likely to
itemize under the old tax plan about half of homeowners itemize for the
prosecutors own homes interesting because you have to have mortgage debt
so about a third of the owners don't have any mortgage debt so really they
weren't necessarily cute or likely to itemize so they're less so homeowners
are more likely to itemize and they may not going forward because there's a
limit on the amount of mortgage interest you can deduct so it and that's the new
part right I mean basically when you talk about itemize you're talking about
basically deducting it you know so it was a powerful deduction for homeowners
and we're saying that now there's a cap so people really can only only there's a
limited tax advantage yeah for deducting mortgage interest but actually in fact
the bigger change is that the standard deduction so that okay let me take a
step back so there are two ways to do your taxes you can either take the
standard deduction it's a lump sum you subtract it no matter how you spend your
money how much you give away how much you say if it doesn't matter you take
the standard deduction and then you you know you subtract that off your income
then you pay taxes on the rest okay or you can itemize your deductions so you
don't take that standard deduction instead you're gonna list out
specifically the tax advantage things you spend your money on so you get to
take money off for mortgage interest you used to be able to take state and local
income and property taxes unlimited that's a change so your mortgage
interest is now limited you can only deduct up to $750,000 interest on a
mortgage up to $750,000 versus a million under the old tax rules okay used to get
unlimited state and local taxes now you can only deduct up to $10,000 so well
charitable contributions you can just those from your income as well that was
unlimited it stays unlimited so no major change there that's group and there are
some others minor tweaks but those are the big ones but ultimately it only
makes sense to itemize if the dollar amount of your itemized deductions
exceeds the standard deduction right and so the fact that the standard deduction
into the new plan is a roughly double but it was under the old plan means
we're going to see why few fewer itemized errs okay I think that was I
feel like that was a little mini tax course that was awesome so you're
definitely more of an expert than you say so hopefully that's super helpful
let's kind of change gears here a little bit let's let's go left and let's talk
about Amazon let's talk about the Amazon headquarters obvious there was a huge
announcement being in New York and in DC or the sort of the Northern Virginia
area so what what is your take on sort of that announcement and how it'll
affect those housing markets yes it's a big question right now yes so the nice
thing for you know there were 20 candidate markets 19 in the US and one
in Canada and the nice thing about Amazon choosing New York and the DC area
specifically Northern Virginia is that those are among the biggest markets that
they would have chosen so when you think about the disruption of a new company
coming in with 25,000 jobs those are big job big jobs markets and so it's gonna
be less of a boost like relative to if they've gone into a smaller market where
the market would have been over more they would be the number one employer
you see they really the government is the number one employer yeah so so it's
it's still a big boost for the local economy but it's sort of in both those
cases it's comfortable with the number of jobs that are added in a year or so
whereas you know it would have been what the other markets typically see in five
years so it'll be a more manageable increase for these markets but it's
still going to be an increase and it's going to shape the local markets
particularly in the areas around where Amazon's going so in the Northern
Virginia area they're talking about the area between Arlington and Alexandria
the excellent they're calling a new neighborhood national landing
oh really yes and in New York they're going to be in Queens and an area known
as Long Island City it's just across the river from Manhattan yeah so you're
gonna see the biggest effects on the market in the areas that are nearby so
when you say five miles 10 miles yeah so we studied Seattle and we looked at the
biggest effect was in an area within five miles because of the higher density
in these two markets the effect could even be more compressed in the DC and
New York areas the alarm you know that remains to be seen we see in Seattle as
we looked at expansions of Amazon in Seattle the biggest effects within the
first year were within one mile of the Amazon Shore the campus and then
long-term like over the next ten years we saw large effects within five miles
so and in that first year home prices grew at double the rate of the
surrounding area Wow so it's not a small effect no it's not and I know that
people in those areas are pretty excited so good time probably to either be
buying or selling in those markets yeah absolutely like one of the things you
mentioned was that the surrounding markets the sort of runner-up markets
also should spill the effect yeah so the runner-up markets I mean they have the
things that Amazon is looking for like a good housing market a good strong labor
economy with lots of educated workers a nice transportation infrastructure I
mean those factors are already in place that's gonna make those other markets
attractive even even though Animas on didn't select them other companies are
likely to move in there so I think they're gonna be each is fine that's
just what I was thinking is that other other large companies will use that as
sort of a list right I was honest on the research for them exactly well this was
super helpful I have learned a lot about 2019 and for the most part I think it
seems pretty good so thanks for joining us and thank you for joining us with
economic insights with Danielle Hale and Audrey Whittington at realtor.com please
check out some of our other videos
you
you
For more infomation >> The 100 | The Key to Survive - Duration: 3:09. 
For more infomation >> Стрим по аватариї - Duration: 1:35:52. 
For more infomation >> LATELY NEWS vom 28. Dezember 2018 | Die LATELY SHOW mit Florian Strzeletz - Duration: 4:15. 
For more infomation >> Misteri Jam 12 MJ12 - 29 December 2018 - Salah Tuntut Ilmu Silat - Duration: 1:03:19. 
For more infomation >> Руны дня прогноз на сегодня 29 декабря / Наталия Рунная #рунныймаг - Duration: 2:08. 
For more infomation >> Fixing Obs studio! - Duration: 11:23. 
Không có nhận xét nào:
Đăng nhận xét