Buying a home is a monumental purchase, so it’s no wonder that people shopping for the perfect piece of real estate are hungry for insights and hints about what the market might hold. If you’re scanning the headlines and industry reports to identify real estate trends 2020, what are you likely to uncover?
Real Estate Trends 2020
What is changing? What will stay the same? A look at real estate trends 2020 should give you a few ideas. Here are the trends that experts are encouraging buyers to watch out for and how they could impact your shopping.
Interest Rates Are Expected to Stay Low
During the last half of 2019, mortgage interest rates stayed relatively low, averaging about 4 percent. Experts suggest that the numbers are unlikely to change much in 2020. NerdWallet reports that the National Association of Realtors, the Mortgage Bankers Association, Fannie Mae, and Freddie Mac all predict interest rates for home loans will end 2020 within a quarter of a percentage point of 2019’s closing rates. That’s good news for would-be buyers.
Home Prices Are Expected to Continue Their Slow Climb
As Dave Ramsey notes, home prices have been creeping slowly higher over the last few years, growing by 5 percent in 2018 and 3.6 percent in 2019. What will happen in 2020? Experts are predicting prices will rise by 2.8 percent. If you’re an aspiring homebuyer, then you will need to identify your budget and work to stay within it. However, demonstrating a little flexibility by either expanding your search range or considering homes that meet your list of must-haves while lacking a few of your nice-to-haves can help you find a home that suits your needs and your budget.
Supply Will Remain a Challenge
The balance of supply and demand has a strong impact on pricing, and a limited supply of desirable homes is one reason that home prices have continued their slow, steady climb. According to Opendoor, the soaring costs of labor, land, regulations, and building materials have kept the number of new homes built relatively low when compared to the number of potential homebuyers since 2008, but 2020 may bring a change. The number of new single-family homes built is expected to exceed 1 million. Unfortunately for those eager to buy, this uptick in construction probably won’t have a real effect on the supply of homes in 2020, but it does bode well for the future.
Demand Will Be Concentrated
In certain areas, important economic drivers will make the housing supply squeeze even sharper. Forbes points out that many major service industries are more effective when they’re clustered together, and that’s leading to a concentration of jobs in major industries in a small number of big markets. In fact, 60 percent of the new jobs created in the last 5 years were in just 30 markets. This workforce concentration produces an even higher demand for housing that drives up both rents and housing prices, so buyers hoping to purchase a home in these markets will need to be prepared for a competitive field.
Buyers Will Affect How People Buy and Sell Homes
The term iBuyer may be unfamiliar, but you’ve probably heard of at least a few of the companies that are part of this trend. Zillow Offers, Opendoor, OfferPad, and RedfinNow are all real estate companies that use tech to get a jump on home purchases by allowing people to request an automated offer for their property. As MarketWatch notes, this model gives sellers both convenience and flexibility. Sellers who accept the offer don’t have to prep the house for showings and can schedule closing around their own plans. What’s in it for the iBuyer? They purchase the property at a bargain price before reselling it at a tidy profit. Homebuyers will want to make sure that they’re paying attention to online listings as they shop because many iBuyers bypass the standard real estate listing services.
Will this be the year that you buy a house or refinance your current home? Count on PrimeLending Kansas City for expert insight, friendly guidance, and smooth services. Contact us today to discover how we can assist you.