The housing market is forecast to stay strong in the 2020. Low mortgages rates, which Redfin expects to hover around 3.8%, will likely invigorate the buyers’ market, leading to an increase in competition as the nation’s housing inventory continues to dwindle due to several factors including rising tenure length. Overall, this means home buyers could have less home buying options, the forecast said. But what else should we expect this year in the housing market?
Back to mortgages… Since mortgage rates dropped below 4% this past year in the U.S., and this opened the door for many people to refinance current loans. The solid economy and strong employment numbers also fueled sales of new homes. In 2020, expectations are that the boom in refinancing will fade out and home sales will increase, but high construction costs will keep housing affordability at bay for many, according to experts.
Also many experts say because rents will continue to rise, more millennials will start buying homes. Apparently, younger buyers are eschewing inner-city living and have their sights set on 1,800 square-foot homes in the suburbs, with good neighborhoods and decent schools. Millennials will take more mortgages than baby boomers and gen-x’ers in 2020, the company predicts. Down payments from millennial buyers will also likely be bigger than ever.
It is also predicted that the U.S. home prices will flatten, increasing just 0.8% nationwide. Prices will decline in more than 25% of the 100 largest metros, including Chicago, Dallas, Las Vegas, Miami and San Francisco, according to Realtor.com.
In addition to consist low interest rates and somewhat an increase in prices, it is expect that the housing market will continue to be competitive. Housing inventory has been notoriously tight over the last year, and experts are saying that trend will continue especially on the lower end of the market. In fact, Realtor.com’s senior economist George Ratiu even predicts a possible “historic low level” of inventory in the coming year.
With that being said, it is expected that we will see the same low interest rates, increase in home prices, and a very competitive real estate market in 2020. Also there are some experts that says that many things will start to unravel in the US economy towards the end of the year which will inadvertently affect the overall housing market. It is safe to say that things will start to look interesting in 2020.