Lower-Cost Homes Should Fair Well in Spring Market, Says NAR
Washington, DC, April 11, 2019-Sellers of houses near or below the U.S. median price of about $250,000 are going to see strong demand in the spring selling season, said Lawrence Yun, chief economist for the National Association of Realtors, while the high end of the market-homes priced above $750,000-will have a tougher time, reports HousingWire.
“For anything below the median home price there will be strong demand because of the good jobs market and the low mortgage rates,” Yun said in an interview. “On the upper end things will be softer, so it will be a bifurcated housing market in 2019 and probably into 2020.”
“Mortgage rates unexpectedly began declining at the beginning of the year, stoking demand by bringing more buyers into the market. Yun said six months ago he thought mortgage rates might reach 6% this year, but he’s now calling for rates to stay in the 4% to 4.5% range.
“The softening at the high end is mainly due to the federal tax cuts that became law more than a year ago, said Yun. The new tax code caps mortgage deductions at $750,000 and limits the deductibility of state and local taxes-known as SALT.
“’Capping property tax deductions, especially for people living in New England states or other areas, such as California, where those taxes are higher, is going to reduce demand’” on the high end in those markets, Yun said.”