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What homebuyers should expect to see in the US housing market in 2019

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Both American homebuyers and sellers should expect to face-off against an even more challenging housing market in 2019, according to a fresh batch of market predictions by Zillow and Realtor.com.

Rising interest rates and home prices are likely to deter some would-be homebuyers, fueling the demand for rental units.

“The central storylines in the U.S. housing market didn’t change much over the past few years, but a series of emerging trends are setting up a much different narrative for 2019,” said Aaron Terrazas, Zillow senior economist, in a statement.

Zillow expects the 30-year fixed mortgage hit 5.8 percent by December 2019. The current rate is 4.75 percent.

Mortgage rates rose by about 100 basis points since January 2018, and they are expected to continue to grow steadily through 2019 — ending 2019 just under 6 percent.

“This will be the highest rates have been since the last recession, although still below the historic average at times of strong economic growth,” reads the Zillow report.

The rise in interest rates will put “a pinch on affordability, particularly in already expensive markets,” and off-set the anticipated moderate home price appreciation.

In 2019, home price growth will continue to slow, with Realtor.com forecasting an annual increase of just 2.2 percent. US home prices have been rising steadily over the last couple of years but at a slower pace.

“Rising mortgage rates and prices will keep a lot of new inventory out of their budget and make it especially tough for first time home buyers,” reads the Realtor.com report.

Inventory, which has been at crisis levels since the housing bust as new construction lags, will increase at a moderate level, posting a 7 percent annual increase. Although the number of homes for sale is increasing, which is an improvement for buyers, the majority of new inventory is focused in the mid-to-higher-end price tier, not entry-level where product is needed the most.

But Realtor.com expects that many high-priced markets will “buck the trend” by posting double-digit inventory gains.

“Inventory will continue to increase next year, but unless there is a major shift in the economic trajectory, we don’t expect a buyer’s market on the horizon within the next five years,” said Danielle Hale, chief economist for Realtor.com, in a statement.

Rent growth is expected to accelerate in 2019 as potential buyers are priced out of the for-sale market by rising mortgage rates turn to the rental market. The recent slowdown in rent appreciation will reverse because of additional demand from spurred buyers.

“Higher interest rates limit what people can afford to pay, and those who are financially stretched but considering buying a home may decide to continue renting,” reads the Zillow report.

Buyers who are able to ride it out will find less competition and fewer bidding wars as more buyers are priced out by rising interest rates. But Realtor.com cautions that some buyers may feel “an increased sense of urgency to close before it gets even more expensive.”

“Unfortunately for buyers, it’s only going to get more costly to buy, especially the most-demanded entry level real estate. To be successful, buyers should think through how they’ll adapt to higher rates and prices,” says Hale.

Meanwhile, the challenging market conditions are expected to have a negative impact on the total number of homes sold as sales continue to soften. Realtor.com predicts a 2 percent year-over-year decline in home sales in 2019.

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New home? Prepare for the unexpected

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(NC) Buying a house, getting married or having your first baby are all major life events that are likely to affect your finances. But whether you’re in the midst of a major life event or not, it’s important to check in on your finances regularly to maintain good financial health.

Your financial health encompasses things like your spending, savings, borrowing and future financial plans. It also means dedicating a set amount of savings for unexpected future events. It can even include optional credit protection insurance, such as TD protection plans, to help cover your debt balances in case of death, a covered critical illness or total disability.

Even though it can be tough to think about the unexpected, life is unpredictable and it’s important to plan for the unexpected. Find more information at td.com.

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Mortgage pitfalls to avoid

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(NC) Throughout life, you may have moments where you’ll make a large purchase or invest in a costly item, like your family home. But whether you’re in the market for your first new property or already have a mortgage, leaving this asset unprotected can be costly.   

Insuring your housing financial debt, as well as debt for other big-ticket items like a new boat for your lakefront cottage or keepsake jewelry like an engagement ring, is a smart investment in your well-being.

To help protect your debt balances like a mortgage, your bank may have optional credit protection insurance products.

“Your home is one of your biggest assets, yet illness can happen at any stage of life. Worrying about your mortgage when the focus should be on health isn’t a situation anyone would wish for,” explains Shirley Malloy, vice president at TD. “Fortunately, we offer mortgage protection to provide coverage for your outstanding balance should you face a covered critical health event.”

Mortgage protection can be purchased whether you’re in the process of applying for a mortgage or already have a home financing solution. But what about protection options for credit card debt?

“Given the unprecedented circumstances of this year, many Canadians are trying to plan for the unexpected to protect themselves and their finances,” says Malloy. “TD balance protection plus is an optional product designed to help you deal with your credit card payment obligations in the event of a covered event, such as loss of employment.”

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Is your internet too slow? It’s probably not you

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(NC) We all know the aggravation of a school lesson that just won’t stop freezing or the family video call that looks more like a photo montage. And, as we adjust to the impact of COVID-19 on our day-to-day, that slow connection can have frustrating consequences.

Working from home and learning remotely, both need fast, stable internet, something not enough Canadians have yet. Even if you have fast devices in your home, if the infrastructure in your area is not optimal, your connection won’t be either.

Right now, cities have the infrastructure needed to ensure access. But rural and remote communities are hugely underserved, with fewer than half having high-speed internet, and fewer than a third of households on reservations have high-speed connections.

Fortunately, change is coming. The Universal Broadband Fund is backing projects across Canada right now to ensure the reliable, high-speed internet connections families need to work, study, access services online, and safely stay in touch with each other.

The fund existed before COVID, but as a response to the pandemic, its timetable has been moved up by four years to a target of 98 per cent of Canadians with high-speed internet access by 2026. With the faster pace, at least 90 per cent of us should be connected by the end of 2021.

The fund is focused on improvements in rural and remote communities across Canada to fix the disconnect between internet access for urban and rural households.  This means more remote work opportunities, better access to remote learning and safer access to healthcare, no matter where you live.

It’s not just for good connections at home, either. The improvements mean much better access to mobile networks on highways between remote communities. The result is better, safer navigation and access to emergency services for your family, even on the road in the middle of nowhere. Mobile projects will be focused on serving Indigenous communities and the roads leading to them.

The shape these improvements will take in your area will depend on where you live. Canada is huge, and its communities are hugely diverse, with diverse needs. Keep an eye out for local projects — they’re a small part of something much bigger.

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