Home prices and mortgage rates are expected to keep rising in 2019, and a new report concludes that would "price out" more than 1 million U.S. households from the housing market.
the National Association of Home Builders' data show that an increase of $1,000 in the national median home price would financially exclude 127,650 households, and if rates increase by 25 basis points, another 1 million will also be pushed out of the market; based on recent trends, such scenarios are "downright probable," Forbes reports. Tendayi Kapfidze, chief economist at LendingTree, anticipates home price appreciation to the tune of 3 percent for the year, and rates to possibly hit 5.5 percent, up nearly 75 basis points from the first week of January's average rate, 4.74 percent, per the Mortgage Bankers Association.
Home prices have been on a steady uptick since 2012, rising 7.7 percent just last year alone, according to Zillow. Mortgage rates, aside from a small blip over the last few weeks, have also been on a tear, jumping more than 60 basis points across 2018. Experts largely predict both numbers to continue rising in 2019, albeit at a slower clip.
At the state level, Texas would lose the most potential homebuyers with a $1,000 increase in median home price, making 11,152 residents no longer able to purchase a house. California and Ohio would lose 9,897 and 7,341 buyers, respectively. Chicago would feel the most impact at the metro level, with just under 4,500 potential buyers priced out. Houston would lose the second-most buyers at 3,546.