If the expectations about housing in 2019 can be summed up in one word, it’s this: balanced.

After months and months on a runaway track, home prices have started to temper, and will continue to moderate in the upcoming year, according to new predictions by several sources. Analysts are anticipating anywhere from 2.2 to 3.79 percent growth in home prices for the year—a considerable dip from past years, but an indicator of a leveling-out market.

The deceleration, however, is not likely to overcome other pressures, like climbing mortgage rates and short starter supply, changing conditions for homebuyers and sellers. According to a forecast by realtor.com®, there will be a fewer than 7 percent increase in inventory overall for the year.

“Inventory will continue to increase next year, but unless there is a major shift in the economic trajectory, we don’t expect a buyer’s market on the horizon within the next five years,” says Danielle Hale, chief economist at realtor.com. “Unfortunately for buyers, it’s only going to get more costly to buy, especially the most-demanded entry-level real estate.”

Meanwhile, interest rates will track toward 6 percent—landing between 5.3 and 5.5 percent, realtor.com’s report shows, or 5.8 percent, according to a forecast by Zillow. In the realtor.com scenario, monthly mortgage payments will rise 8 percent.

The increase is an obstacle for renters; in fact, it is now the “biggest challenge” toward purchasing for 19 percent of renters, according to a forecast by Trulia. Thirteen percent said the same this spring.

“I believe we’re going to see rates go toward what they were 10 years back coming out of the recession: closer to 5.25, 5.3 percent,” says Cheryl Young, senior economist at Trulia. “The real issue around affordability and rising interest rates—whether or not people know how much that’s going to impact their monthly mortgage payment—is the fact that prices have been outstripping wage growth. The bottom end of the market, especially first-time homebuyers, are already feeling the squeeze, so any rise in interest rates takes another bite out of affordability.”

For the buyers capable of paying prices today, however—and at the interest rates of tomorrow—there will be a measure of relief.

“Certain headwinds—including rising mortgage interest rates, higher rents and stiff competition for housing in the most desirable areas—will only grow stronger over the next year, but that won’t necessarily be a bad thing,” says Aaron Terrazas, senior economist at Zillow. “A slower-moving market is likely to give more buyers a chance to catch their breath and choose from a wider selection of homes that fit their preferences and budgets.”

First-timers will again be a force in 2019, accounting for 45 percent of mortgages, according to realtor.com’s report. Many will be millennials who are moving or trading up. According to Trulia, 21 percent of millennials are planning to purchase in the next year.

Given the buyer dynamics, 2019 will continue the favorable market for sellers, as well—but not everyone will garner multiple offers, as in recent years. According to the forecast by realtor.com, sales will soften for the year, down 2 percent.

“For the first time in a while, home seller sentiment has decreased,” Young says, citing the report by Trulia. “I think people, net, are still thinking it is a good time to sell, but it is not as favorable as it was last year.”

One critical development in 2019 is the effect of the Tax Cuts and Jobs Act. According to the research by Trulia, half of homeowners believe they will not benefit from the changes when they file their taxes—and many, realtor.com’s report shows, will have a bigger bill at tax time. How housing will be impacted overall is unknown.

Another development is disasters, which are growing in intensity and number. Following two devastating hurricanes and the wildfires this year, analysts are expecting more occurrences in 2019. According to the predictions by Zillow, a “record number” of homes will be lost as a result—but according to the findings by Trulia, 52 percent of homeowners are “no more or less concerned” about the potential threat.

The Takeaway
With the burn-out in home prices, and rates rising, housing has been inching toward normal this year, and is anticipated to stabilize through 2019. Battered buyers may have improved prospects in the upcoming year, but will still contend with cost and inventory pressures.

“2019 looks to be a pivotal year as the market cools and transitions from one marked by robust recovery into one more in line with historic norms, and more balanced between buyers, sellers and renters,” Terrazas says.

Suzanne De Vita is RISMedia’s online news editor. Email her your real estate news ideas at sdevita@rismedia.com.

Today’s head of household is largely over 50 years old, according to a recent report by the Harvard Joint Center for Housing Studies (JCHS), “Housing America’s Older Adults 2018.” In fact, households headed by someone over 65 represent 55 percent of the nation’s households, while 65 million households are headed by someone aged 50 or over.

Are their needs being met? According to the report, the necessary tools that America’s aging population rely on are in short supply. Living arrangements, financial resources, health and functional abilities of these household leaders all pose a challenge.

“We need to address gaps in the affordability and accessibility of our housing stock, both of which are essential to older adults’ independence and well-being,” said Jennifer Molinsky, the lead author of the report. “As the number of households in their 80s grows, it will be essential that we strengthen the links between housing, healthcare and other services.”

Among the biggest roadblocks is the wealth gap. In 2016, median homeowners aged 50-64 had a net worth of $292,000—nearly 60 times that of the median renter in the same age group. While median incomes increased over the last five years for older adults—by 9.6 percent for those aged 65-79 and by 5.2 percent for those 80 and over—those aged 50-64 only saw an increase of 2.6 percent.

The racial divide widens this gap even more. While 81 percent of white households aged 50-plus own their homes, only 57 percent of black households can claim ownership—a 24-percentage point gap, the largest since recordkeeping began in 1976.

High costs of living are also hindering the aging population. Nearly 9.7 million households use at least 30 percent of their income to pay for housing, while over half of this segment pays more than 50 percent of their income.

While this segment of the population continues to age, there’s a shortage of properties that can address the physical challenges and disabilities that accompany them. For example, in 2016, 17 percent of households aged 50 and over included individuals who had trouble walking or climbing stairs (including 43 percent of those who are aged 80 and over). According to recent data, only 2.5 percent of homes in the U.S. have features that address these mobility concerns: single-floor living, no-step entries and extra-wide halls and doors.

The biggest risk? The largest portion of aging heads of household (57 percent for those over 80) is the most vulnerable because they are living alone. The same goes for renters—77 percent within the same age group live alone. This segment of the population largely relies on non-residents or paid caregivers for assistance, but also has lower incomes than larger households, posing more complex challenges.

Vulnerability can also be location-based. For those aging heads of household who reside in natural disaster-prone areas, the dangers are amplified. Disruptions to healthcare in response to power outages, road closures and healthcare facility closures can significantly impact aid efforts. Additionally, after-disaster dangers, such as mold in the home or flooding, are additional risks that could dramatically impact the livability and health of this population.

As baby boomers begin to turn 80 in less than a decade, demand for accessible apartment units and homes will only continue to grow, as will the wealth and racial gap and the need for funding to support financial assistance programs that help pay for basic housing and other necessities.

In which institutions do the solutions reside? According to the report, state and local governments, in addition to the private and nonprofit sectors, can play a role in developing more affordable and suitable housing for these aging heads of household.

“Housing America’s Older Adults” is a supplement to the JCHS annual State of the Nation’s Housing report.

Liz Dominguez is RISMedia’s associate content editor. Email her your real estate news ideas at ldominguez@rismedia.com.