Happy New Year! At this point, the firecrackers have been cracked, the champagne has been popped, and the resolutions have been made. If your list of goals for 2020 includes buying a house – you may want to know if this is a great time to do so! Luckily for you, the experts have all weighed in. We have collected the bullet points to help make your resolution a reality.
Of course, keep in mind, predicting the market is like predicting the weather. This time last year, economists predicted that interest rates would rise, then they fell!
With that said, overall, economists say that 2020 will be a positive year for the housing market.
Rates Will Remain Low-But not Drop by Much:
The majority of housing economists project that rates will stay below 4% throughout the year. If you are waiting for mortgage rates to decrease by a lot, don’t hold your breath. While it looks like they will remain under 4%, don’t expect them to drop by much.
According to Chairman Jerome Powell, the central bank will wait until there is a sustained increase in inflation before they hike rates.
This is excellent news for first time home buyers! With lower mortgages rates, more people will be able to afford to buy a home. Olsen at Zillow shared, “Low rates will encourage more renters to pursue homeownership, further boosting overall homeownership rates that have been on the rise since 2016.”
Builders will Continue to Build:
2019 was a stellar year for home builders. Builder confidence reached it’s the highest level since 1999. These home builders show no signs of slowing down. Low rates and baby boomers downsizing have a large part to play in that.
Homebuilders are shifting away from luxury homes and focusing on more entry-level properties.
Despite these new homes, inventory will remain low.
For one, many baby boomers are ready to retire and “age in place,” tying up their real estate.
Second, to keep up with demand, homebuilders would need 1.1 to 1.2 million new homes, and they are well below that.
Home Sales and Prices will Moderate:
Many believe the low supply of homes will prevent 2020 from being a huge year in the housing industry, while others project modest growth due to low rates.
For us in the beautiful state of Arizona, we are expected to see more explosive growth than others!
All in all, it could be an excellent year for the housing industry! If you are thinking of selling or purchasing, reach out to your local escrow officer today.
Pioneer Title Agency is a full service company with an operating philosophy of "Commitment to Service." The company provides title insurance, escrow, account servicing, trustee sales, as well as builder related trust services through more than 70 offices in Arizona.