The 2020 Real Estate Projections That May Surprise You

This will be an interesting year for residential real estate. With a presidential election taking place this fall and talk of a possible recession occurring before the end of the year, predicting what will happen in the 2020 U.S. housing market can be challenging. As a result, taking a look at the combined projections from the most trusted entities in the industry when it comes to mortgage rateshome sales, and home prices is incredibly valuable – and they may surprise you.

Mortgage Rates

Projections from the experts at the National Association of Realtors (NAR), the Mortgage Bankers Association (MBA), Fannie Mae, and Freddie Mac all forecast mortgage rates remaining stable throughout 2020:

Since rates have remained under 5% for the last decade, we may not fully realize the opportunity we have right now.

Here are the average mortgage interest rates over the last several decades:

  • 1970s: 8.86%
  • 1980s: 12.70%
  • 1990s: 8.12%
  • 2000s: 6.29%

Home Sales

Three of the four expert groups noted above also predict an increase in home sales in 2020, and the fourth sees the transaction number remaining stable:

With mortgage rates remaining near all-time lows, demand should not be a challenge. The lack of available inventory, however, may moderate the increase in sales.

Home Prices

Below are the projections from six different expert entities that look closely at home values: CoreLogicFannie Mae, Ivy Zelman’s “Z Report”, the National Association of Realtors (NAR), Freddie Mac, and the Mortgage Bankers Association (MBA).

Each group has home values continuing to improve through 2020, with four of them seeing price appreciation increasing at a greater pace than it did in 2019.

Is a Recession Possible?

In early 2019, a large percentage of economists began predicting a recession may occur in 2020. In addition, a recent survey of potential home purchasers showed that over 50% agreed it would occur this year. The economy, however, remained strong in the fourth quarter, and that has caused many to rethink the possibility.

For example, Goldman Sachs, in their 2020 U.S. Outlook, explained:

“Markets sounded the recession alarm this year, and the average forecaster now sees a 33% chance of recession over the next year. In contrast, our new recession model suggests just a 20% probability. Despite the record age of the expansion, the usual late-cycle problems—inflationary overheating and financial imbalances—do not look threatening.”

Bottom Line

Mortgage rates are projected to remain under 4%, causing sales to increase in 2020. With growing demand and a limited supply of inventory, prices will continue to appreciate, while the threat of an impending recession seems to be softening. It looks like 2020 may be a solid year for the real estate market.

This Month In Real Estate : June 2018

This Month In Real Estate : June 2018

The Indigo Skye Group is happy to bring you the Real Estate News update for June 2018. Each month we share on our blog and social media networks the latest information and market insights we have available. In this update you get a birds-eye view of home sales, home prices, inventory and the most popular mortgage types and rates.
Here are just a few of the national real estate numbers we’re tracking for you right now. Click to the image below to watch the video.

HOME PRICES

The median home price increased to $257,900 in April, which was up 3.2 percent from March and up 5.3 percent from April of last year. The median home price has increased by approximately $12,900 in the past year alone.

 

HOME SALES

The National Association of REALTORS® reported home sales at a seasonally adjusted annual rate of approximately 5.5 million homes during the month of April. This was a decrease of 2.5 percent from March and a decrease of 1.4 percent from April of last year.

 

INVENTORY – MONTH’S SUPPLY

There was a 4.0-month supply of housing inventory in April, which was an increase of 14.3 percent from March. The total number of available homes for sale has decreased by 2.4 percent compared to April of last year.

 

Mortgage Rates

 

 

Related article: Homeowners and Appraisers See Price Increases. 

Thanks for stopping by the Indigo Skye Group blog! Be sure to check the blog weekly for more informational and educational articles about real estate.

This Month in Real Estate: March 2018

 

 

HOME PRICES:

The median home price decreased to $240,500 in January, which was down 2.4 percent from December and up 5.8 percent from January of last year. The median home price has increased by approximately $13,200 in the past year alone.

 

HOME SALES:

The National Association of REALTORS® reported home sales at a seasonally adjusted annual rate of approximately 5.4 million homes during the month of January. This was a decrease of 3.2 percent from December and a decrease of 4.8 percent from January of last year.

 

HOME INVENTORY – MONTH’S SUPPLY:

There was a 3.4-month supply of housing inventory in January, which was a 6.2 percent increase from December. The total number of available homes for sale has decreased by 2.9 percent compared to January of last year.

 

For indepth information and an explanation of real estate conditions in your market, contact The Indigo Skye Group!