Everyone wants to be a soothsayer at the end of the year, with predictions for what to expect in the months to come. While no one can say for sure what awaits for the 2020 housing market, experts have weighed in with some compelling expectations.
Mortgage rates will remain low
In fact, some expert predictions have them dropping even further. “According to Odeta Kushi, deputy chief economist at title insurance and settlement services provider First American, there’s ’emerging consensus’ that rates will remain low next year—likely somewhere between 3.7% and 3.9%,” said Forbes. “Forecasts from Freddie Mac and the Mortgage Bankers Association back this up, both predicting 2020 rates within this range. Fannie Mae actually predicts rates will clock in even lower, vacillating between 3.5% and 3.6% throughout the year.
Prices will continue to rise.
“Home prices will continue their climb upward, according to experts, largely thanks to tight inventory and high demand. According to the latest home price forecast from property data firm CoreLogic, home prices should tick up by 5.6% by next September—up from the just 3.5% jump we saw this year. It seems the price growth may continue beyond 2020, too. Data from Arch MI shows the chance of home price declines at a mere 11% for the next two years. There are currently no states or metro markets projected to see prices decline in that period.
Inventory will remain tight.
“According to recent data from Redfin, the average homeowner is staying in their home 13 years—up from just eight years in 2010. In some cities, homeownership tenures are as high as 23 years.”
However, there is a glut of new homebuyers coming, and they have a heightened interest in new construction, which could ease inventory constraints.
The share of millennial homebuyers will continue to increase.
“Data from Realtor.com shows Millennials made up a whopping 46% of all mortgage originations in September—up from 43% one year prior. Meanwhile, shares of Baby Boomer and Gen X mortgage activity declined. It’s no wonder, either. Millennials rank homeownership as one of their top goals in life—higher than even marrying or having kids—and with interest rates low and incomes up, it’s the right time to buy a home for many.”
Millennials will head for the suburbs.
It’s a familiar pattern—rising priced send homebuyers farther out in search of affordability. Millennials are embracing this trend by heading for the ‘burbs.
“As home prices skyrocket, cash-strapped Millennials are looking toward more affordable places to put down roots—namely smaller, suburban towns on the outskirts of major metros. The trend has led to an uptick in ‘Hipsturbia’ communities—live-work-play neighborhoods that blend the safety and affordability of the suburbs with the transit, walkability and 24-hour amenities of big cities.”
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