As the saying goes, everything old is new again. Want some real estate predictions for the new year? Look no further than 2019 to see the real estate trends, which are expected to continue through 2020.
Housing Outlook Is Bright
According to Sam Khater, chief economist for Freddie Mac, traditional indicators such as housing starts, building permits and home sales demonstrate that the housing market in the United States “remains on solid ground.”
Mortgage Rates Remain Low
Freddie Mac’s fourth-quarter predictions estimate an average mortgage rate of 3.7 percent for 2019. While their research team anticipates a possible slight increase to 3.8 percent in 2020, rates will still be low enough to take the pressure off buyers scrambling to beat rate hikes.
Buyers aren’t the only ones who will benefit from low mortgage rates. This past October, the Mortgage Bankers Association reported a 134 percent year-over-year increase in their Refinance Index for the last week of the month. Look for low mortgage rates plus increased equity to cause a continued surge in refinancing.
Home Prices Are a “Mixed Bag”
Fluctuations in home prices are one of the most closely watched real estate trends. After increasing at an above-average pace for several years, putting home purchases out of reach for many buyers, prices were due for a slowdown.
In their October predictions, Freddie Mac anticipated a 2.8 percent increase in home values for 2020, down from 3.3 percent in 2019. But since this figure is a median for the nation as a whole, individual markets can vary greatly. Some cities are actually experiencing a current drop in home prices.