February 10, 2020 2 min read
If you are considering putting your house on the market or buying a new home in 2020, Forbes Magazine recently issued its 2020 Real Estate Outlook that may be of interest.
Forbes Magazine Senior Contributor, Aly J. Yale, spoke to six housing professionals to get their take and predictions on what the 2020 housing market might look like.
In general, the experts expect the current mortgage rates (3.75%) to remain low for 2020 and lending rates to stay pretty much the same as well. According to one expert, that means that "refinancing your home will remain a viable option for next year" especially for those people locked into their current mortgage 5 or more years ago.
That is good news for those of us looking to refinance or buy a new home.
On the sales front, the supply and demand might not be such great news - depending on which side you come down on. Home prices are expected to continue to climb and inventory shrink. Yale's experts suggest that "tight inventory and high demand" across the country is going to lead to some competitive bidding wars on hot properties. As there isn't a lot of new inventory on the market, there isn't a lot of competition and that is leading to price pressures and increased housing prices.
On the lower end of the housing spectrum, i.e. cheaper homes or starter homes, the competition and price pressures are expected to be even worse. Entry-level homes are expected to rise higher than incomes next year. So new home buyers might be in for some rough roads ahead of them.
And speaking of new home buyers, the younger market or the Millennials are expected to keep up their home buying streak. Realtor.com showed that a staggering 46%, of all mortgage originations in September came from the Millennials, with the suburbs being a big draw for this group. The expected strained inventory in 2020 is not great news for first time home buyers in this group, as they are forced to enter a tougher housing market in 2020. The Baby Boomer generation is not making it easier, as Yale reports that many Boomers are choosing to "age in place" and thus keeping more homes off the market and inventory tight.
The experts also see a trend towards digitization across the entire industry. The once paper-centric mortgage process has been trending towards more tech-savvy buyers, specifically Millenials. The younger buyers tend to be more accustomed to a tech experience and the housing industry is responding with innovative services that respond to their tech-savvy audience.
As with all predictions, a number of things can derail these forecasts, but in the past, Forbes' real estate outlook has been a solid guide of what to expect in the US housing market.