As 2018 winds down, so too have several leading indicators of home sales activity: New and existing home sales, builder sentiment, price growth and more have taken a turn for the worse in the closing months of the year.

Now that year-end wrap-ups and forward-looking predictions are popping up, some real estate experts are coming to slightly different conclusions about the outlook of next year’s housing market. They range from warnings of a “tougher market ahead,” as Realtor.com economists put it, to “modest housing market growth” according to Freddie Mac’s latest economic forecast.

The two reports, and others like them, may be reaching different conclusions in their headline summaries because of several variables and uncertainties in play in next year’s market.

Economists seem to agree on many key points: The U.S. economy will remain strong in 2019, but likely won’t see the staggering growth rates that the first half of 2018 brought once a new round of government stimulus kicked in. Higher economic growth brought higher interest rates, which combined with record-high home prices, only put a damper on sales later in the year.

Contrasting views on home price increases, rising mortgage rates

Next year, economists generally agree that these major market indicators will level off, but they can’t agree just how bad things will get.

Realtor.com’s 2019 forecast sees home prices to grow by just 2.2 percent through the year, while Freddie Mac projects more than double that rate (4.3 percent).

On mortgage rates, Realtor.com again takes a harder tack, projecting the 30-year fixed-rate loan will average 5.3 percent over the course of the year, growing to 5.5 percent by the end of 2019. Freddie Mac’s outlook pegs the 30-year mortgage rate average at 5.1 percent, however.

“The biggest unknown about the housing market next year is whether the recent negative trends will persist or the market will adjust to the shock of higher mortgage rates and resume modest growth,” Freddie Mac’s 2019 outlook explains. “Our forecast favors the latter – modest growth.”

The deciding factor in Freddie Mac’s projection is the behavior of interest rates, which it expects will moderate their growth into 2020. If that comes to pass, it “may be just enough to let the housing market catch its breath and resume growth.”

If buyers aren’t scared off by higher rates, Freddie Mac expects more will be drawn into the market thanks to moderating home price growth. Home builders should respond to this increased demand — Freddie’s economists expect total housing starts to end 2018 at 1.26 million, then grow to 1.3 million in 2019 and a more impressive 1.4 million by 2020.

Realtor.com agrees that all signs point to higher inventory next year, both from building activity as well as homeowners entering the market as sellers. But in most markets, Realtor.com expects high-end inventory to continue being added faster than base-price homes, making 2019 no better or worse for buyers overall, especially first-timers.

“Although long-term desire to own a home remains strong, especially among younger Gen Z and millennials, the market challenges that make owning a home difficult continue to keep out first-time buyers, locking them out not only of their home, but also of the wealth by equity generation that owning provides,” Realtor.com explained in its forecast.