HOUSING MARKET OUTLOOK FOR 2020

A quick review of the 2019 housing market reflects low rates, high demand and limited supply of lower-priced housing.  Will 2020 be the same? 

Here are 6 points mortgage, real estate and housing professional agree on is in store for 2020

1.  Mortgage rates will remain low.  Current rate is 3.75% but there is strong evidence to indicate the rate may go lower - possibly 3.5%- 3.6%.  Freddie Mac and Mortgage Bankers Association see this in the new year forecast.

2. Prices will keep rising - Home prices will continue to rise in large part due to high demand and limited inventory.   Redfin chief economist Daryl Fairweather explains, "We are not seeing a ton of listings.  Without more listings coming on the market, there will be competition starting off in early 2020 and that will lead to more price pressure."  

Ralph DeFranco, chief economist for mortgage insurer ArchMI, stated, "This is especially the case for lower price points, since builders have tended to focus on more expensive, higher-profit houses and less on replenishing low inventories of entry level homes."

3. Inventory will be tight.  "You can't buy what's not for sale," explains Odeta Kushi, deputy chief economist at title insurance and settlement provider First American.  Kushi further goes on to state, "As first-time buyers lock-in these historically amazing rates and existing homeowners refinance - in droves in recent months, everyone will stay put and not sell.  Where's the incentive?"

4. Millennials will maintain their buying streak, while Baby Boomers hold up inventory.  Millennials face an uphill battle even though they account for 46% of all mortgage originations.  The problem - Baby Boomers are choosing to age in place keeping more homes off the market.

5. The "Burbs" will be a big draw for Millennials.  As home prices continue to rise, Millennials will look to smaller suburban towns on the outskirts of major metro markets to buy homes.  The live-work-play neighborhoods that blend the safety and affordability of the suburbs with transit, walk-ability and 24 hour amenities of big cities will slowly breath new life into small towns outside major urban hubs.

6. The "Industry" will continue to ride the wave of new and efficient technology.  The mortgage and real estate spheres have been rapidly moving away from manual, paper-laden processes and embracing the every expanding tech offerings that exit.  Competition will narrow as companies combine technology across the board with well-established institutions.