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.
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.