The news of job growth, super low unemployment, and a thriving real estate market are all signs pointing to a strong economy. However, there is also an undercurrent of fear of another recession.
The National Association of Realtors (NAR) hosted a Real Estate Summit Forecast on December 11, 2019 with 16 economists giving their educated forecasts on top challenges and opportunities for the coming year.
Here is some of what they had to say about today’s market…
- Home values are increasing, but leveling out in certain price points
- Younger buyers and African American homeownership rates are struggling to gain traction
- House prices have been increasing much faster than household incomes
- Lack of inventory continues to be an obstacle, especially at entry level price points
- It is difficult to find enough construction workers to fill demand
Here is what to expect in 2020…
- Expect mortgage rates to stay on hold or tick up slightly, possibly to 3.8 or 3.9
- Predict that Millennials will make up half of all purchase mortgages in 2020
- Predict weaker economy with slow growth
- Expect rising home sales, and some additional supply
Average predictions based on responses of participating economists…
- Mortgage rates will rise slowly, perhaps hitting 4.0% in 2021
- Expect 60,000 more housing starts in 2021
- Price appreciation will be slower, more closely in line with income growth
- Expect rents to rise a little faster than home prices
- Overall optimistic, with concerns for a recession relatively low… a one in three chance
