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Housing Market Predictions for 2020

Housing Market Predictions for 2020

Housing Market Predictions for 2020

Lebanon Democrat I February 22, 2020 Real Estate Review I Helene Singer Cash

 

 

2019 was a stellar year for the US housing market with the median US home price rising to $316,000 according to Realtor.com

Looking at the Real Estate Market for 2020 with real estate trends you will want to understand no matter if you are buying or selling because 12 million Americans now spend over half of their earnings on purchasing a home.

 

Forbes – Five Housing Market Predictions for 2020  

Rising rents will lead to more millennial buyers. In a Chase Home Lending study, 70% of millennials surveyed said they would be willing to cut back on activities like spa trips, shopping and going to the movies to save money for a home purchase. That says a lot for this generation. 

 

Baby boomers will sell their homes at a higher clip. Zillow recently published a study that found baby boomers are preparing to sell approximately 27% of America’s homes between now and 2040. Many of these homeowners will ultimately be seeking newer, low-maintenance homes with fewer stairs to climb and smaller yards to maintain.

 There will be a new construction boom. Due to the shortage of existing homes for sale, potential buyers are increasingly considering new construction properties. At the same time, in December 2019 the National Association of Home Builders reported that home builder confidence reached the highest level in 20 years.  

Photo by Christian Bowen on Unsplash

Home prices will keep climbing, but growth rates will slow. The S&P CoreLogic Case-Shiller Home Price Indices, which track U.S. residential real estate prices, noted a year-over-year increase of 3.3% as of October 2019 and suggested a similar trajectory for 2020.  According to Craig Lazerra, managing director and global head of index investment strategy at S&P Dow Jones, "If people were waiting to see if house prices would actually decline, as they did in [the Great Recession] ... that’s probably not going to happen, at least given the current economic backdrop."  

Gentrification will continue in the fastest growing cities. Evolving socioeconomic and racial dynamics will persist in urban cores of America's fastest-growing cities. According to a recent report by the New York Times, urban neighborhoods are attracting wealthier home buyers in a pattern that frequently makes it more challenging for middle-class home buyers to purchase properties in the neighborhoods where their families may have lived for the last 40 years.  

 

Dave Ramsey – 2020 Real Estate Trends

Home Prices are Still Rising Slowly. Overall, home prices grew slower in 2019 (3.3%) than in 2018 (5%). And this year seems like it will be no different. In fact, real estate gurus predict that home prices will only rise by 2.8% in 2020. 

Mortgage Interest Rates are on the Decline (for now).  Mortgage interest rates have been going down in 2019—steadily dropping below 4% for common types of loans. In 2020, economist geeks think interest rates will stay around 3.7% for a 30-year mortgage and 3.2% for a 15-year mortgage (the only type of mortgage Dave Ramsey recommends). 

Photo by Precondo CA on Unsplash

The Majority of Home Buyers are Still Millennials.  …Our final trend is about who is buying homes. And once again, millennials took the lead as the largest group (37%) of home buyers last year. (according to the NAR report)  

 

 

AZBIGMEDIA – Top 8 Housing Trends that’ll Dominate

Investment in Real Estate Will Continue to Increase.  One of the most prominent real estate trends at the moment is the increased investment in the industry, despite the economic decline of 2018. The industry continues to receive hundreds of billions of dollars in capitalization. 

There will be a Slower Rise in Home Prices.  The housing market saw a jump in home prices between 2017 and 2018. Real estate prices have still continued to increase but at a lower price. The percentage of home listings have also increased, albeit marginally. These developments will continue in 2020.

Millennials Continue to Dominate the Home Buyers’ Market.  In the past few years, millennials have dominated the residential property buyers’ market. This is one of the trends in real estate that’s set to continue for a while. 

Buyers Need Affordable Homes.  For a long time, house rents have consistently beaten house purchases by a huge margin. As residential home prices continue to increase, the demand for rental housing will increase as well.

There’s a Shift to Second – Tier Cities.  With real estate prices in first-tier cities out of reach for many investors and home buyers, more people are setting up shop in more affordable second-tier cities. It’s one of the housing market trends that have contributed to a significant increase in investments in such cities.  

 

Photo by Scott Webb on Unsplash

 

New technology will Continue to be Featured in Housing Trends. In 2020 and beyond, the housing market will continue to adopt new technology, including apps, smart home technologies, and online selling platforms. Expect to see an upsurge in the number of high-tech companies that service the real estate sector. Most of these tech companies will focus on simplifying transaction processes.  

Higher Interest Rates on Mortgages.  After several years of stagnation, mortgage interest rates have recently started to increase. This trend is expected to continue in 2020. Rising interest rates point to the continued willingness of Americans to borrow and spend.

Increased Focus on Amenities to Attract Buyers.  Residential property developers and landlords are increasingly capitalizing on amenities to entice buyers and tenants. Besides parking access and the staple gym, builders are offering other unique amenities such as movie theaters, communal gardens, and so on. There’s an influx of smart homes as well, thanks to savvy investors.

 

This entry was posted on Monday, February 24th, 2020 at 3:58 PM and is filed under Featured, Updates. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.



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