U.S. Housing Outlook 2019

Housing market activity slowed in 2H18 in response to higher mortgage rates. Existing and new home sales declined, while new construction and home prices slowed down Despite affordability remaining an issue going forward, demographic trends will continue to support housing demand

Home price appreciation will continue to decline, but will remain above inflation in the short to mid-term due to a suboptimal supply of new and existing homes for sale

Tighter financial conditions will balance out some of the regional disparities built up over the last decade

The attractiveness of large coastal knowledge-intensive metro areas will remain, but the lack of affordable housing will drive some residents to smaller metro areas away from the coasts

Demand for apartments in attractive areas will remain strong, driven by the strength of the local economies and lack of affordable ownership options

Mid-size metro areas that can attract young families are likely to benefit from the rebalancing in the housing market in the wake of lower affordability.

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