CoreLogic released its predictions for 2019, outlining several factors that will be making economic news in the new year.
CoreLogic Chief Economist Frank Nothaft explained that economic growth only needs to last seven more months in order to set the record for the longest economic expansion in U.S. history, based on business cycle dates going back more than 160 years.
And Nothaft believes growth will do just that, as the nation’s gross domestic product comes in at 2.4% in 2019. While this would be slower than the forecasted 3.1% for 2018, it would still be enough to push unemployment to 3.4% – a 50-year low.
Nothaft also predicts that interest rates will continue to rise as the Federal Reserve continues to normalize the level of interest rates.
“We expect long-term yields to rise as well, nudging 30-year fixed mortgage rates up to an average of about 5.25% by next December, the highest in a decade,” Nothaft said in a video for CoreLogic’s economic outlook for December 2018.
And of course, these higher rates will affect housing market activity.
“At the margin, homeowners who currently have low-rate mortgages will be incented to stay in their home rather than sell, keeping the new-listings flow relatively low,” Nothaft said. “The larger monthly payments that come with higher mortgage rates will likely soften buyer demand, leading to less pressure on home prices.”
CoreLogic forecasts home price growth will slow by one percentage point over the next 12 months.
Other experts are also predicting a slowdown in housing. For example, realtor.com recently forecasted that buying and selling a home will become more difficult in 2019.
Here is the full video of Nothaft’s predictions for 2019: