Experts are weighing in on trends in real estate for the year. Most agree that mortgage rates are likely to keep moving upward, affecting affordability. But there’s good news for buyers too, such as more mortgage options.

1. We Still Need More Houses for Sale. In many local areas, the overall market still favors sellers because supply is short of demand, and this will likely continue in 2019. But the good news for buyers is that there will be more on the market this year than last. More home owners are encouraged by what they can get for their home and are deciding to sell.

2. Home Prices in Key Areas Will Continue to Rise. In the areas that are in most demand, prices will continue to rise, but experts predict the appreciation will slow down. So we aren’t likely to see massive price hikes as in former years.

3. Mortgage Rates Will Increase. From early 2018 to mid-December, 30-year fixed mortgage rates went up to around 4.75%, which was less than three-quarters of a point. Forecasters expect mortgage rates to rise at a slower pace. But keep in mind that rates bounce up and down throughout the year.

4. New Homes Shrink in Size. New construction home size has been shrinking due to an incremental move to additional entry-level home construction. The median size of a single-family home at the end of 2018 was 2,320 square feet, nearly a 5% decrease from three years earlier. Builders are recognizing the pent-up demand for starter homes and seeing profitability in those communities.

5. First-Time Buyers Dominate the Market. The first-time buyer share of mortgages has increased from 40% to over 60% in the past decade. Realtors® and mortgage lenders focus their service on them for good reason.

6. Lender’s Requirements Continue to Ease Slightly. Lenders had to tighten up standards in the years following the 2008 mortgage crisis to ensure borrowers could repay their loans. But standards are gradually loosening in the form of reduced documentation requirements, lower credit scores, and smaller down payment options.

7. More Buyers Will Opt for ARMs. Whenever rates on fixed-rate mortgages go up, more borrowers tend to opt for adjustable rate mortgages (ARMs). They do so because an ARM typically gives them a few years of a lower interest rate and they take their chances on the change in rate when the introductory period ends.

8. Sellers May Need to Check Their Confidence on Price. First-time buyers search for homes below the median price of a market mostly because of affordability. Sellers above the median price may need to offer other incentives for buyers or else price more competitively.