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Insurance Article

Looking For A Home? This Is What 2019 Has In Store For You

January 21 2019
happy-family-standing-near-their-home

Things you should look out for before buying a home in 2019

A home is not just bricks, stones and mortar; it is the coming together of emotions and memories that makes us call a house, our home. Be it your struggles, moments of joy or sadness, your home is a silent witness to all.

Given the flurry of emotions that the mere mention of the word emanates, it is quite natural on your part to look for a place that you could call your home. However, you also know that purchasing a home is riddled with self-doubt and trepidations. Hence, it is always better to conduct proper market research before you decide to take this life-altering decision.

Here are some of the factors and trends to watch out for in 2019, if you are a prospective buyer.

  1. Mortgage rates

  2. It is quite likely that you would take a house building loan to have your own house. In this regard, it is important to look after the mortgage rates. The mortgage rates have been climbing over the past few years. However, it is still low compared to the economic growth rate.

    However, the picture is about to change in 2019, as it is expected that there would be a further upward revision in mortgage rates. So, if you are looking to get a loan for your home, it is recommended to opt for fixed interest mortgage. It will help you remain protected in case there is an upward tick in the movement of mortgage rates.

  3. Rising demand for homes

  4. It is true that rising mortgage rates would deter some potential homebuyers. However, that doesn’t mean that there would be a fall in demand. As a large fraction of the millennials would turn 29 this year, an age of family formation and home buying, there would be a large uptick in demand for homes.

    Compared to GenX and ‘baby boomers’, millennials would make up the largest segment of home buyers in 2019 and 2020. However, it is still going to be a difficult year for the first-time buyers owing to the high mortgage rates.

  5. Reduction in buying power

  6. You must have a monthly budget in mind to spend on the home loan. So, as the mortgage rate increases, it would mean less borrowing capacity for those who believe in fixed monthly budget.

    This in turn would result in a slowdown of sales. As demand for the flats tank, it is expected that there would be a downward revision in the price movement.

  7. Lower taxes

  8. The government is toying over the idea of lowering the GST on under-construction houses by as much as 5%. This benefit is expected to be passed on to consumers to facilitate the sale of the property. So, if you are looking for your dream house, be on the lookout for such announcements.

  9. Drop in home sales

  10. The rise in mortgage rates will have an effect on purchase volumes. It is quite likely, that this would in turn, affect home prices, resulting in swelling inventories, forcing prices to eventually come down.

    However, as a prospective buyer, this would bring in good news for you if you can time your purchase of the new home well.

  11. Most in mid- to high-end segment

  12. As more and more people back out from the new offerings owing to high rates, buyers who stay in the market would likely make a profit in the long run. Majority of the homes that are coming up are in the mid and higher-end segments.

    So, first time home buyers will likely find it tough to land a good home at the entry-level.

  13. Disruptions brought in by technology

  14. Innovations and new technologies like blockchain, artificial intelligence, machine learning etc., are changing the way in which buyers and sellers interact in other market segments. Technology is going to play an even greater role in times to come, across all domains.

    For instance, technological innovations like these would help in better understanding of the buyer. These inferences would help builders come up with greater customisations in their offerings. Such innovations would also help you in identifying price trends and make a more informed decision when it comes to choosing your dream home.

    Thus, there are a lot of dynamics and events that would interplay amongst themselves in shaping out the real estate market. There would be rate cuts owing to GST reduction. But an increase in mortgage rate would have a dampening effect on the demand.

    While you get your dream home, do not forget to keep it insured from any risks. Browse through different home insurance plans, keep an eye on the property insurance premium, use a home insurance premium calculator to get better clarity and get yourself the best home insurance in India.

Related Article:

The Right Age to Buy a House and How to Make it Affordable
Tips to Finance Your Second Home

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