Low mortgage interest rates dominated the 2019 housing market. However, many potential homeowners were unable to take advantage of the low rates due to high demand and low inventory. Many experts predict 2020 will offer much of the same. Here is a brief summary of the top real estate trends for 2020.
Available homes for sale will remain tight in 2020. Some experts believe new home construction will improve, but it may not provide enough inventory to meet the demands of today’s homebuyers. Although some in the industry believe rates will stay below 4 percent, higher demand will drive prices higher, which could make home buying unaffordable for many people.
Sales prices will likely rise in 2020 as millennial demand for homes increases. Corelogic, a real estate analysis firm, predicts home prices will increase by 5.6 percent in 2020. With fewer listings hitting most markets, homebuying competition will heat up.
Also, experts predict that the price of entry-level homes will see a significant increase, but the incomes of many first-time homebuyers will not keep pace with the rise in home prices. The available inventory of starter homes will remain low, which will also cause the price of entry-level houses to rise in 2020, according to many experts. Data also shows home prices are expected to rise over the next two years.
The millennial generation accounted for nearly 46 percent of home originations by late last year. Experts expect this trend to continue in 2020. Studies show this generation considers homebuying one of their top priorities in life. Some millennials feel now is a good time to buy a home with interest rates still hovering around historic lows.
However, millennials might face a tough market with more competition from higher homebuying demand. With many baby boomers deciding to stay in their homes longer, it will decrease the number of available homes for sale, causing prices to accelerate, according to some in the industry.
The real estate and mortgage spaces will continue to evolve as digital trends expand. More companies will gravitate towards digital mortgage applications, digital income information, and digital appraisals. Some in the space believe that the digital revolution will decrease the timeline and streamline the overall process of closing times.