As the New Year approaches experts begin predicting trends for the 2020 real estate market. This is also a time for reflection on the 2019 real estate market and how the results compare with the anticipation at this time last year.
2019 Real Estate Summary
According to MarketWatch, at this time last year, mortgage interest rates had reached their highest level in years and they seemed positioned to continue to increase.
“The forecasters were only partly right: in the first half of 2019, mortgage rates remained high by recent historical standards, and that did cause a slowdown in sales — one that was more pronounced than experts projected. But mortgage rates dropped through most of the year until September when they reached a nearly three-year low.” – MarketWatch
Many believed the increase in rates would cause a pause in home sales until buyers adjusted to the new rates. Although the expected rate increase did not happen, MarketWatch believes the year will still fall short of early predictions.
Millennials Start Buying
Looking ahead to 2020 several sources seem to agree that Millennials (born between 1981-1997) will be major players in real estate. According to Realtor.com millennials will account for more than 50% of loan originations, surpassing both Baby Boomers and Gex X combined. 2020 Housing Market Predictions – Realtor.com describes the impact millennials will have on real estate in the coming year.
“Overall buyer demand will remain very robust, particularly at the entry level, in 2020. The largest population cohort in the country (those born in 1990) will turn 30 in 2020, accounting for 4.8 million millennials hitting peak home buying age. As a group, Millennials (those born 1981-1997) will take more than half of all mortgages next year. For the first time ever, Millennials’ share of mortgage originations will surpass 50 percent in the spring, outnumbering Gen X and Baby Boomers combined. The last generation to take more than half of all purchase originations was Gen X in 2013, just six years ago. Accordingly, other generations’ footprint will continue to contract, with Gen X and Baby Boomers taking 32 and 17 percent of mortgage originations respectively.”
TheStreet also predicts millennials to be major players in the 2020 real estate market. They anticipate inventory to be thin making it more challenging for buyers to find a home. A shortage of inventory can increase the chance of a bidding war. Fewer homes on the market can be good for sellers initially but according to TheStreet, it will also cause homeowners and builders to list property thus adjusting the inventory balance later in the year.
Buying a Home in 2020
For now, interests rates are expected to stay low. Low rates began to cause an upswing in the market towards the end of the summer and we have not seen the end of that movement.
If you are planning to buy a home in 2020, low interest rates are certainly on your side. However low inventory and competition for starter homes can be challenging. In order to be ready when you find a home you would like to purchase, make sure that you have a pre-qualification from a trusted Upper Valley mortgage lender. The more prepared you are to complete the sales transaction, the better chance you have of purchasing a home in a competitive situation.
Title Mortgage Solution is a leading mortgage banker and broker located in the heart of the Upper Valley. To begin the loan process with our team, get started by completing our online Mortgage Application or call our office at 603-643-1400 to speak with one of our loan officers today!