Experts Predict a Strong Job Market and Low Mortgage Rates Will Fuel 2020’s Housing Market

Heading into 2020, a strong job market and low mortgage rates should bode well for the housing market. But thanks to a shortage of inventory and new listings, the positive real estate trends may turn out to be a mixed blessing.

Golden Age of Home Buying?

Unemployment and interest rates are both at their lowest levels in years. While widespread economic uncertainty in 2019 seemed likely to push mortgage rates north of 5 percent, rates actually declined to an average below 4 percent. In contrast, at the turn of the millenniumĀ mortgage rates were averaging 8.5 percent.

The National Association of Realtors Makes Their Predictions

According to the National Association of Realtors, mortgage rates are expected to remain low during the year. NAR chief economist Lawrence Yun says 30-year fixed mortgages will stay below 4 percent and finish the year around 3.8 percent.

Increases in new-home sales are projected to hit a 13-year high of 11 percent, but supply of existing homes will continue to be tight, resulting in a more modest 4 percent increase. Yun calls this a “healthy development for potential home buyers,” as prices will remain relatively affordable.

Despite the optimistic outlook, Yun does offer a word of caution. Increases in economic activity and inflation may trigger a corresponding rise in interest rates.

Real Estate Experts Weigh In

Other experts tend to agree with NAR’s outlook. Realtor.com and Redfin both anticipate tight inventory in the face of strong demand. As a result, the biggest challenge facing buyers will be finding homes, not affordability. In terms of mortgage rates, Bankrate.com chief financial analyst Greg McBride also sees them holding steady at or slightly below 4 percent.

Properties Online has a robust set of tools to help you leverage current real estate trends. Contact us for more information.

By Properties OnlineProperties Online on FacebookProperties Online on Google+Properties Online on Twitter Visit author's website

At Properties Online we are dedicated to helping real estate professionals grow their business by offering innovative and invaluable technology tools with a smile. Our web-based software is extremely easy to use and makes creating a website, a flyer or a video simple and fun!

Leave a Reply

  Subscribe  
Notify of