Few people predict that this year will be a record-breaking year for home prices.
But relatively speaking, new year might be the best time to put your house on the market. Especially if you’re on the fence about selling this year or next, Nick Ron, CEO of House Buyers of America, recommends going with the devil you know rather than the devil you don’t.
“I think it’ll be better than 2020 and 2021 – who knows what’s going to happen in those years,” Ron says.
Housing Market Expectations
Home price growth slowed in the second half of 2018, with fewer buyers entering the market, at least partially due to rising interest rates issued by the Federal Reserve. In this year, consumers shouldn’t expect homebuyers to flood the market again and drive prices through the roof, but it’s also unlikely to be a crisis for home sellers.
If you bought your house in the last year or two, still love it, and don’t want to part with it, go ahead and wait another five years before revisiting the thought of selling. But if you’re weighing your options to sell, considering selling this year or maybe the year after, don’t play the waiting game.
Here are four reasons to sell your house in this year vs new year.
- New buyers are still entering the market.
- Interest rates are still on the lower end.
- You have high equity.
- Selling now will be better than waiting till 2020.
New Buyers Are Still Entering the Market
As interest rates rise, some buyers will hesitate to make an offer on a home or apply for a mortgage, so be ready to see occasional drops in buyer activity. If your house is at the higher end of the price range in your market, you should expect less buyer interest than before. Ron notes that the combination of rising mortgage rates and home prices exceeding buyers’ budgets has caused the slowing of homebuyer activity in recent months.
However, with the available housing inventory remaining low, even with rising interest rates, buyers who are ready to purchase will still shop for homes. The most significant wave of new homebuyers will be among millennials, who are mostly first-time buyers.
In a Harris Poll survey of 2,000 U.S. adults commissioned by real estate information company Trulia, more than one-fifth of Americans between ages 18 and 34 said they plan to buy a home within the next 12 months.
Already, millennials make up the largest share of homebuyers at 36 percent, according to the National Association of Realtors, which released the number in March 2018.
The bottom line: While houses may sit on the market for an average of a few more days than in the old year when the market was white-hot, buyers remain active, and it’s still possible to profit from your home sale.
Interest Rates Are Still Low-ish
Mortgage interest rates have been bumpy over the last few months. According to Freddie Mac, interest rates for a 30-year, fixed-rate mortgage reached their highest level in over seven years in November, when they hit 4.94 percent. However, as of the end of February, interest rates are down slightly to 4.35 percent, according to the mortgage loan company. While it’s reasonable to expect mortgage rates to continue to climb gradually throughout the following year, they’ll remain much lower than the historic high of more than 18 percent in 1981.
It’s important to remember that while mortgage rates tend to mirror the Fed’s interest rate activity, they are based on the market at that moment, your financial status, and the property you’re looking to purchase.
[Read: How Moving to a New Home Affects Your Taxes.]
Just because the Fed raises rates at one meeting doesn’t mean mortgage rates will follow that exact pattern. “Not every Fed increase is passing on (to) a mortgage rate,” says John Pataky, executive vice president and chief consumer and commercial banking executive at TIAA Bank.
A sudden leap in mortgage interest rates is unlikely in this new year, though Pataky notes that you should be ready to see rates continue to climb. “We do expect over the next 12 months that mortgage rates will continue to drift higher,” he says.
If you’re looking to get the lowest interest rate possible on your next house, try to make a deal sooner rather than later.
You Have High Equity
Homeowners who bought during the recession or shortly after benefited from historically low interest rates and, until around 2015, lower home prices that were still in recovery mode. If you fall into that category, your home equity has risen with nearly every mortgage payment, each renovation you made to the house, and all the other houses on the block that sold for a higher price.
The higher your equity in your home, the more you net from the sale, which can quickly go toward the down payment on your next house. The larger your down payment, the better you look to lenders the lower your interest rate will be, and the less likely you’ll need to increase monthly payments with private mortgage insurance.
Selling in Current Year vs. New Year
If not selling your home this year means putting your house on the market in 2020, the sooner option is the best one. In a survey of 100 U.S. real estate experts and economists by real estate information company Zillow, released in May, almost half expect the next recession to occur in 2020. Another 14 percent believe the recession will hold out until 2021, while 24 percent of panelists expect the recession earlier – sometime in this year.
Whether you believe the recession is imminent or a long way off, current real estate patterns indicate a sudden upswing in activity or prices is unlikely shortly. Real estate markets tend to operate on a cycle of their own, the length of which varies by market but can be between 10 and 16 years total and flow from a seller’s market to a buyer’s market with a period of balance in between.
“It doesn’t look like there’s anything on the horizon that’s going to cause a big spike in home prices or increase demand dramatically,” Ron says.
9 INTERIOR DESIGN TRENDS TO LOOK OUT FOR.
It may be time to update your decor.
An October 2018 report from the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University projected that remodeling spending will grow to more than $350 billion in the third quarter of this year.
While it’s certainly an increase from the $331 billion of remodeling spending during the same period in 2018, the expectation shows a slowing in growth compared to recent years.
Whether you’re renovating your home for yourself, updating your home to sell, or looking to spice up a living space you rent, you’ll see some new trends entering the interior design field this year – and others easing out of the spotlight. Here’s what to keep an eye out for.
Updated on March 8: This story was published earlier and has been updated with new information.
Trends are getting a longer shelf life.
An interior design trend, by definition, is the temporary popularity of a style, pattern, color or approach to decor. But as the cost of homes continues to climb and the cost of renovating spikes as well, trends are sticking around longer, explains Anna Starmer, U.K.-based author of “Love Color: Choosing Colors to Live With” and founder of color and trend forecasting company Luminary Colour.
“The interesting thing about trends right now is that they are slowing down,” she wrote in an email. “A colour family is popular for longer than (one) season. This is down to many factors, but one of the main reasons is that people are living real lives – they do not have enough time to redecorate every (six) months.”
Well-being comes into play.
The Danish concept of Hygge – being cozy and content – has been popular in the U.S. for a couple of years, particularly in the cold winter months when people bundle up to stay warm. But Starmer suggests that the current social or political mood is also encouraging people to make their home a comfortable safe haven of sorts: “(I)t is no surprise that in recent times of uncertainties in the world, we are all starting to favour comforting shades and warming colours in the home.
“That extends to softer textures in furniture, pillows and blankets, rich scents like pumpkin or citrus and a setup that encourages relaxing.
Design in all spaces and sizes.
Whether you’re still holding onto your dream of a tiny home or you simply can’t afford a bigger apartment, interior design is trending toward emphasizing conscious design in all spaces – not just the palatial homes of the wealthy.
For example, Pottery Barn launched its small space collection, PB Apartment, in early 2018 to cater to customers who have less space to deck out. You’re also likely to see a growing number of companies offer furnishings and design aesthetics that serve more than one purpose and can be used in a variety of rooms.
Don’t be afraid to be bold.
Everyone’s comfort level is different, but those who are willing should feel free to embrace a bold, eclectic look at home in the coming year. HGTV star and interior designer Taniya Nayak says to go for bright accent colors, such as jewel tones and colors that contrast – think blue and orange – and don’t be afraid to layer. “I love doing paint techniques, and I love wall coverings too, but some people are really petrified of wall coverings,” says Nayak, who partners with FrogTape painter’s tape. When in doubt, make your statement by adding color with different types of wall decor (not all photos and prints), painting an accent wall or layering throw blankets and pillows in bright, contrasting colors to create a new focal point in the room.
Shades of green will pop up everywhere.
Expect interior designs to pull more inspiration from nature in the coming year, bringing lively green into the foreground. Starmer is predicting different shades of green to be more visible not just in interior design, but in fashion as well. However, she warns that you should keep texture and light in mind any time you select a color for a space. “A shade of emerald may look fabulous on a velvet-covered chair but hideous on the wall of a bathroom,” she says.
Neutrals are warming up.
Gray, stark white and the gray-beige combo color “greige” have been go-to neutrals for a few years. But Starmer says neutral shades in the home are going to warm up as people look to evoke the feeling of more natural settings in the home. “Neutral and natural colours now need to be soft and warm like a favourite cashmere sweater – or the colour of a baby deer,” Starmer says. Capturing these neutrals with natural items like wood, real stones and ceramic pieces help “counteract our very unnatural lifestyles,” she says.
Floors are getting more natural.
In 2018, dark wood floors have been on the decline, according to Lee Crowder, design gallery and model branding manager for Darling Homes, a subsidiary of homebuilder Taylor Morrison Inc., based in the Dallas-Fort Worth area. Looking forward to this year, wood floors should continue to stay on the lighter side, but many manufacturers are noting that a matte finish is gaining popularity, which makes the floor look more natural. Recycled and engineered wood remain a more sustainable alternative to the typical wood floor, and manufacturers are even increasing the variety of tile or vinyl floors that convincingly look like real wood.
Mixed metals are officially a look.
Finding the perfect match to existing hardware in your bathroom or kitchen can be difficult, which is part of the reason why mixed metals started trending to begin with. But now it’s not just about convenience. With the right balance, you can bring multiple metals into a room and create a rich, glamorous look. Nayak notes that metals don’t have to be restricted to fixtures, lamps and coffee table legs; opt for metallic paint colors and incorporate geometric shapes on the walls to tie metals into other parts of the room.
Trends are catering to comfort levels.
Some of the looks Nayak expects to see more in the coming year vary widely, from soft, romantic pastels and textured palettes to bolder jewel tones and metals. Rather than focusing on one widely accepted trend, you have the opportunity to embrace what works for you and keep it more unique than in years past. How do you know which trend to embrace? Look at your closet. “Whatever your wardrobe says about you is very much how you should approach your design,” Nayak says. If you’re big on patterns and bright colors, the eclectic trend can make your house feel like home again. If you’re a solids-and-neutrals kind of person, working in more of a natural look at home can provide the update you want and need.
Interior design trends to keep an eye out for.
Interior design trends that will be big this year include:
- Longevity of trendy pieces, colors and patterns.
- Comforting shades and warming colors.
- More furnishing options for smaller spaces.
- Bold accent colors.
- Shades of green on walls, furniture and in fashion.
- Warmer neutral colors with less focus on gray.
- Lighter wood floor finishes for a more natural look.
- Mixed metals to make replacing kitchen or bathroom fixtures easier.
- Focus on comfort in design choices.
