Top Mortgage Trends to Look for in 2019

Five mortgage trends to track in 2019, whether you’re buying, selling or somewhere in between.

Ali Hardy Jan 22, 2019

If you’re wondering what’s in store for housing and mortgage trends this year, you’re not alone. Whether you’re a hopeful homebuyer or a happy homeowner, consider these five mortgage trends on the horizon for 2019, as identified by Zions Bank’s Mortgage Division Manager Roger Jones.

Mortgage Trend #1: Interest rates will continue to rise

The Federal Reserve has announced plans to raise interest rates again in 2019, however it’s unclear if those changes will impact mortgage rates.

Currently, the interest rate for a 30-year fixed-rate mortgage is about 4.6 percent. If mortgage rates were to increase to 5 percent or more in 2019, the consequence to potential homebuyers would likely be a decrease in overall purchasing power.

Jones says rising home loan interest rates may lead to more buyers sitting on the sidelines, as affordability will continue to be a major factor this year.

Mortgage Trend #2: Another good year for home equity

Much like 2018, home values will continue to appreciate this year. Zillow forecasts equity growth of more than 6 percent.

As homeowners continue to gain equity, the demand for home equity credit lines and home equity loans is likely to increase. Because these types of loans are secured by your home, the interest rate is often lower than with other types of debt.

Interested in a home equity credit line? A Zions Bank home equity credit line is currently being offered at prime minus 2.03 percent for the first six months, 5.59%-7.09% variable APR thereafter.

Mortgage Trend #3: ARMs will be attractive

As interest rates continue to dominate conversation in 2019, the adjustable-rate mortgage (ARM) will become a top option for many consumers. Jones says it’s sometimes easy to forget that there are alternatives to the traditional fixed-rate mortgage and in a climate of climbing rates, the ARM often makes sense.

ARMs have lower initial rates compared to fixed-rate mortgages, giving borrowers lower monthly payments in the first few years. Payments and interest rates can increase when the rate-adjustment period kicks in, however depending on your plans, it could still be a benefit strategically. For example, you could choose a 7/1 ARM and then sell the home within seven years before a rate change takes place.

Mortgage Trend #4: Refinancing will stall

A rising interest rate environment is expected to significantly impact refinance trends this year, according to Jones. If interest rates increase, refinance activity in 2019 is expected to decline. The truth is, many homeowners refinanced while rates were lower, so the majority of consumers will not see a benefit to refinancing this year.

Mortgage Trend #5: Once again a seller’s market

There is some debate about whether 2019 will be a better year for buyers or sellers. The housing market slowed a bit in the fourth quarter of 2018, with fewer home sales and new construction starts compared to earlier in the year.

Despite some deceleration, it will likely still be more favorable to be a seller in 2019. Many factors will impact the market and drive demand this year, including employment growth, wage growth, consumer confidence and interest rates. As long as homes are affordable, we will likely see a continuation of high demand throughout 2019.

Visit the Zions Bank Home Loan Center to learn more about home loan products and services or talk to a Zions Bank mortgage loan officer who can assist you through every step of the home loan process.

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