Q1 2019 U.S. Housing Market Report

2019 U.S. Housing Market Report Sends Mixed Signals

The first quarter of 2019 has ended, and now it is time to take stock and evaluate the events seen in the U.S. housing market over the first three months.

Overall, mortgage demand has risen, and home sales are growing.

Still, it is prudent to take a closer look at the U.S. housing market in general to understand better the developments driving the current market atmosphere.

New Home Sales

New home sales are the first area of the housing market to evaluate in the first quarter. According to residential construction data released in March 2019, recent home sales in the United States for Q1 rose in all major areas except the West, which remained unchanged.

Meanwhile, new housing rose 26.9 percent in the Northeast, 28.3 percent in the Midwest, and 1.8 percent in the South regions of the United States. The new construction housing market is experiencing a significant growth pattern on a month-to-month basis.

As a result of the increase in sales, there has been a decrease in the number of new homes available, down to 340,000 at last count. According to the available data, this trend seems likely to increase in the months and quarters.

Existing Home Sales

The current home sales report is the next area of the housing market to be looked at regarding Q1.

Based on information that the National Association of Realtors released, there has been an 11.8% increase in the overall sales of existing homes in Q1. This is notable because it follows the most significant month-over-month gain (February 2019 to March 2019) since December 2015.

The regional rates are significantly different regarding the overall growth experienced by the new construction housing sector.

Specifically, the northeastern market was the one that stayed flat during this period, while all of the other three experienced growth that averaged into the somewhat substantial increase that was witnessed.

Overall, many positive changes in the existing home sales market should give market watchers something to watch.

HousingMarket Video: A record jump for existing U.S. home sales.

U.S. Mortgage Rates

The behavior of mortgage rates is another factor to be considered when examining the first quarter. There are several sub-factors to consider as it pertains specifically to the U.S. housing market.

The mortgage rate dropped in late March 2019 and has been relatively down. The average fixed rate on the 30-year mortgage dropped from 4.25% to 4.125%.

Many believe this is a direct result of the Federal Reserve declining to raise rates for 2019, which seems to be in response to a growing market perception of slowing global economic activity this year.

Presently, 15-year fixed-rate mortgages are now at an average rate of 4.03%, and the 5/1 ARM rate also settled at an average of 4.08%.

Nationally, there is an ongoing belief that the housing market is heading towards a slump, which is an idea that is somewhat backed up by the Federal Reserve’s recent actions. However, mortgage banking continued to grow last quarter.

Q1 Economic Events

The economic event on the mind of nearly every person paying attention to financial markets and government policy – is a slowing global economy.

In particular, the sluggish growth of economies in Europe and Asia makes it seem likely that the needs will be affected here in the U.S. as lenders will potentially be more stringent with their repayment expectations.

Additionally, some specific tertiary housing elements are causing worry to investors and homeowners alike. Mortgage rates are higher than buyers remember and continuing a climb that started in 2017.

While the stock market problems that punctuated the end of 2018 likely made the mortgage rates drop for 2019’s first economic quarter, the bigger picture reveals rates are much higher than two years ago.

The overall rate increase over two years is around 2 %, even accounting for the recent dip.

Federal Reserve Steadies Rates

The Federal Reserve appears on a path to keep interest rates steady for the remainder of 2019, with no plans to make adjustments for the time being. The result of this action yielded dropping mortgage rates.

The announcement was made in mid-March when the 30-year mortgage rates held at 4.4%. The mortgage rates have now adjusted in light of this information, and The Fed is taking additional measures, such as buying bonds.

It is suspected that an economic turndown at this point would push mortgage rates to the higher end of their range.

However, that seems unlikely to happen for the remainder of the year, although it could be on the horizon for 2020 and beyond.


According to the Department of Housing and Urban Development, one notable change occurred in the first quarter of 2019. Their first quarterly review shows that reverse mortgage programs are doing very poorly.

There has been a significant drop of 17.7% from last year. Additionally, the fourth quarter of 2018 was seen as lackluster.

The overall number of endorsements for these loans totaled 7,388, roughly worth USD 2.48 billion.

These figures represent a decrease in revenue of 18.2% from the end of 2018. While this is not going to affect everyone, it is something that the entire U.S. housing market is watching.

The 2019 U.S. housing market appears to be beginning to right the ship following a tumultuous end to an otherwise moderate 2018.

Mortgage rates are shrinking now but are still higher overall than in recent memory. New and existing home sales are up, but some portions of the market must be watched going into the second quarter.