Mortgage interest rates went up
Mortgage interest rates have played an important role in the slowing of the housing market. That's because as they go up, so do monthly mortgage payments. And we're talking big bucks: A single point increase can add more than $100 to a monthly bill and tens of thousands over the life of a 30-year, fixed-rate loan. That plus higher home prices are taking a toll on prospective homeowners.

The result is, more buyers are pushed to the sidelines. Others are purchasing cheaper and smaller homes, moving to less desirable locations, or considering inexpensive fixer-uppers.

Mortgage rates reached a high of 4.94% in November, before tumbling down a bit to hit 4.75% earlier this month. While that's a welcome reprieve for buyers, they're unlikely to keep going down. The Federal Reserve is poised to continue hiking short-term interest rates this year and into 2019. And while mortgage rates aren't tied to the short-term ones, they typically follow suit.


What does that mean for 2019? Buyers should anticipate rates exceeding the 5% threshold.