HOUSTON, Jan. 16, 2019 /PRNewswire/ -- Housing market activity slowed in the second half of 2018 in response to higher mortgage rates, though home price appreciation remains solid at 5.1 percent year-over-year according to the 2019 Housing Outlook published this week by BBVA Research.
Home prices are driven by a shortage of both new and existing homes for sale. The lack of new homes has been a feature of the housing market since the Great Recession, and it is unlikely new construction will increase enough in 2019 to alleviate the shortage. Existing homes supply will remain low due to higher interest rates, which is likely to prevent current homeowners from selling and relocating, per the report.
Demographics will continue to drive demand, with aging Millennials forming families and searching for single-family homes in suburban areas, while Baby Boomers have still not started downsizing at a significant degree. The attractiveness of large coastal areas will remain, but the lack of affordable housing will drive some residents to smaller metropolitan 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-sized metropolitan areas that can attract young families are likely to benefit from the rebalancing in the housing market in the wake of lower affordability. However, small metro areas and rural regions will continue to struggle to attract residents.
In all, while affordability will remain an issue, demographic trends will continue to support housing demand. While home price appreciation will slow, it will remain solid. The report further states that tighter financial conditions will help rebalance some of the regional disparities built up over the last decade.
For more details, read the full report here.
About BBVA Group
BBVA (NYSE: BBVA) is a customer-centric global financial services group founded in 1857. The Group has a strong leadership position in the Spanish market, is the largest financial institution in Mexico, it has leading franchises in South America and the Sunbelt Region of the United States; and it is also the leading shareholder in Garanti, Turkey's biggest bank for market capitalization. Its diversified business is focused on high-growth markets and it relies on technology as a key sustainable competitive advantage. Corporate responsibility is at the core of its business model. BBVA fosters financial education and inclusion, and supports scientific research and culture. It operates with the highest integrity, a long-term vision and applies the best practices. More information about BBVA Group can be found at bbva.com.
About BBVA Compass
BBVA Compass is a Sunbelt-based financial institution that operates 645 branches, including 332 in Texas, 89 in Alabama, 63 in Arizona, 61 in California, 45 in Florida, 37 in Colorado and 18 in New Mexico. BBVA Compass ranks among the top 25 largest U.S. commercial banks based on deposit market share and ranks among the largest banks in Alabama (2nd), Texas (4th) and Arizona (6th). BBVA Compass has been recognized as one of the leading small business lenders by the Small Business Administration (SBA) and ranked 6th nationally in the total number of SBA loans originated in fiscal year 2017. Additional information about BBVA Compass can be found under the Investor Relations tab at bbvacompass.com. For more BBVA Compass news, follow @BBVACompassNews on Twitter, visit newsroom.bbvacompass.com, or visit bbva.com.
SOURCE BBVA Compass