The 2020 Real Estate Market

by c21commonweath_ldowling 2. March 2020 09:57

What will the rest of 2020 look like for the real estate market? Now that we’re near the end of the first quarter of the year, it’s easier to guess how things will go through December, although making accurate projections is always difficult. Here are six strong trends that are likely to govern the real estate market for the remainder of 2020:

1. Mortgage Interest Rates Continue to Drop

According to Freddie Mac, mortgage interest rates declined in 2019. As of January 2020, the average rate was just 3.62%. Most experts expect this trend to continue. Lower interest rates let buyers spend more on property because they’re spending less on servicing their loans.

2. Baby Boomers Are Ready to Sell

The Wall Street Journal reports that 21 million baby boomer homeowners may be ready to sell. As this generation ages and retires, owning and maintaining a large home is no longer attractive for many of them. If a lot of boomers sell, many young families will have the chance to buy spacious homes at financially friendly terms.

3. Rising Rents Make Buying Better

Rising rents, driven by an increased demand for housing, make buying a better option than renting for many people. Young people with job security are ready to invest in homeownership instead of continuing to rent an apartment.

4. Expect More New Construction

The U.S. Census Bureau has found there is a boom in new construction of privately owned residential housing units. Smaller cities all over the country are filling their open areas with new housing.

5. A Crash Seems Unlikely

Any time there’s a boom in real estate, some pundits automatically start looking for the next downturn in the market. It’s impossible to be certain, especially in an election year, but as long as the job market stays strong and unemployment stays low, a housing crash seems unlikely.

6. Gentrification Is Still a Factor

When the economy is doing well, there’s always a push for urban renewal. Unfortunately, these renewal efforts often drive property values up and force low-income people out of the area. Gentrification can be a blessing or a curse, depending on your point of view.

Nobody can predict the future with complete accuracy, but the trends are clear. Based on how things are going as of March, 2020 is shaping up to be a good year for real estate. If you’re thinking of buying or selling a home, now could be the right time to move.