Over Sixteen Years of Professional Experience in Residential and Commercial Real Estate.

2020 REAL ESTATE FORECAST

A strong job market and low mortgage rates should sustain the housing market in 2020. The problem will be finding enough homes for buyers.

With unemployment hovering at a 50-year low and interest rates well below historical norms, the real estate industry is being dragged down by scarcity in housing stock, especially at lower price ranges. Not enough homes are being built, and homeowners are staying put longer, creating a bottleneck.

Still, the market is on better footing than it was a year ago, when economic uncertainty caused by global trade tensions, stock market volatility and a government shutdown, along with rising mortgage rates and home prices, put a damper on sales. Mortgage rates, which seemed poised to surpass 5%, a level they hadn’t reached since 2011, retreated in 2019. The average rate of the most popular mortgage, the 30-year fixed, has remained below 4% the past 32 weeks, according to Freddie Mac data. At the start of 2000, it was 8.5%.

In their forecasts for 2020, most real estate experts anticipate the housing market moving sideways rather than up or down.

“Housing appears poised to take a leading role in real GDP growth over the forecast horizon for the first time in years, further bolstering our modest-but-solid growth forecasts through 2021,” said Doug Duncan, Fannie Mae’s chief economist. “In our view, residential fixed investment is likely to benefit from ongoing strength in the labor markets and consumer spending, in addition to the low interest rate environment. Risks to growth have lessened of late, as a “Phase One” U.S.-China trade deal appears to be in place and global growth seems likely to reverse course and accelerate in 2020.”

• National Association of Realtors: The trade association for real estate agents predicts moderate growth in the housing market and continued low mortgage rates.

New-home sales are expected to rise to 750,000, an 11% increase that puts them at a 13-year high. Existing-home sales will continue to be held down by lack of supply, rising modestly to 5.6 million, a 4% increase. The national median sale price of an existing home is expected to grow to $270,400, an increase of 4.3% from 2019.

Tim Burke is a 16 year veteran of Residential Real Estate in Central and Southern Florida with specialty in relocation, property management, selling and purchasing experience. Contact Tim for thge best advice on your next move! 352-661-7001 or timburkerealtor@gmail.com
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