The State of U.S. Home Buying in 2019

In the United States, for the average American, in 2019 it is now less feasible to buy a home and more affordable to rent a house. The market dynamics are such that home prices are going up faster than rental rates, and because paychecks aren’t keeping pace, home ownership is slipping out of reach for many consumers.

It’s a somewhat convoluted landscape. Mortgage rates are rising (Zillow predicts a 5.8% interest rate by the end of this year for 30-year mortgages). High-interest rates mean higher monthly payments. People who can’t afford high monthly mortgage payments are simply continuing to rent rather than to buy homes.

Additionally, home prices are still trending upward, increasing an average of 6.7% annually in some locations. So the potential home buyer faces high home prices plus mortgage rates that are still climbing. ATTOM Data Solutions published a US Home Affordability Report in 2018, stating that the median home price in the United States was at its least affordable level since late 2008.

Meanwhile, the 2019 Rental Affordability Report found that in almost 60% of the counties analyzed, an average-sized home was less expensive to rent than to buy.

The Impact: When You Want to Sell Your Home

What does this mean for homeowners who want to sell?

It’s a mixed bag. Because home prices are still strong, it is a good time to sell, even though the buying pool is at historically low levels. Add to that the fact that the US existing home inventory was only 1.55 million at the end of 2018. Other than December 2017, when the inventory was 1.47 million, that is the lowest it has been in the past five years. Each year since January 2014, the total number of homes for sale has decreased. This is a good thing for a home seller.

Homeowners still predominantly sell their homes with the aid of realtors, going through the traditional process of putting them on the market, dealing with showings and open houses, entertaining offers, and finally, signing contracts at a closing table.

Some homeowners choose to sell properties to investors and circumvent the tasks associated with the standard selling process. House buyers such as Houston RE House Buyers, found at, are investor companies that buy properties as-is. Investors typically make offers quickly, and once offers are accepted, the path to the closing table is short and uncomplicated.

The Impact: Investors Who Buy Houses for Rentals

What does this mean for investors with rental properties?

The current state of the market is favorable for investors with short- and long term rental properties. Given that fewer people can afford to purchase a home, that same pool will be looking for houses to rent.

Incidentally, according to BiggerPockets, a resource and online community for real estate investing, the following five counties are “the most affordable rental markets”: Roane County (Knoxville area) in TN;

Peoria County, IL; McMinn County (near Athens), TN; Green County (Dayton), OH; and Rhea County (Dayton area), OH. The highest-rent counties are in, not surprisingly, California, Hawaii, and Virginia.

Aaron Terrazas is a Senior Economist at Zillow, referenced in a November 2018 article by Ben Lane of HousingWire. Terrazas says that the housing market in 2019 is going to look different from its appearance over the last few years.

He agrees that mortgage rates will continue to increase, and affordable housing will continue to be in short supply. However, the market is cooling, he says. Because of that, buyers will have more time to choose homes that are good fits for their budgets and lifestyles. The market will look more like it has historically looked, and a settling/balancing will occur between buyers, sellers, and renters.