2020 Real Estate Market And What Homebuyers Need To Know
2020 Real Estate Market Dependent On Consumer Confidence On Job Stability And Economy
One of the biggest factors affecting the 2020 real estate market is consumer confidence in the economy. The economy needs to be strong for homebuyers to have the ability to repay their mortgages. All the right things are in place. The lowest unemployment numbers in 50 years. The stock market hitting record levels. No signs of a recession. Home prices rising year after year. Trump believes in tax cuts to stimulate the economy and have consumers spend and invest.
President Trump is working on 2020 Tax Cut 2.0 to make sure the economy remains strong.
Strong Stock Market Is A Great Economic Indicator For Americans
Today, the Dow surged 1,173.45 because Bernie Sanders is out of the 2020 Presidential Race. Sanders did not do too well yesterday in the Super Tuesday Democratic elections. It seems the front runner is former Vice President Joe Biden who has early signs of dementia and has done absolutely nothing in his 50-year political career. The only way Joe Biden will get elected President of the United States will be through cheating.
The markets do not like Bernie Sanders. Sanders is a socialist who wants to tax the middle class and the wealthy. Sanders wants a 90% death tax, medicare for all, and free education for all which means major tax hikes for any American making $29,000 or more. Homebuyers will not pull the trigger on a home purchase unless they feel secure about their job stability, future earnings, the economy, and their future earnings.
The Trump Administration has all of the right formulas for economic success for homebuyers.
What Does The 2020 Real Estate Market Forecast Look Like For Homebuyers
Michael Gracz of Gustan Cho Associates said the following about the outlook of the 2020 Real Estate Market:
The housing market is a solid foundation for the U.S. economy going into 2020. In addition to this, home sales are projected to increase substantially in the coming year. This can be seen in the recent report from Time which showed an increase in buyer traffic, increasing by 12.6 percent nationwide. If you’re in the West, you probably saw a good year, with activity jumping 23.1 percent. When thinking about when to make your next push in the industry, do not wait until spring when most of the competition will also be out. Instead, Gustan Cho Associates Mortgage Group and I recommend starting now, since buyers are already flooding the market. Mortgage rates should remain low throughout 2020 and 2021, averaging around 3.8 percent. Fannie Mae, the Mortgage Bankers Association and the National Association of REALTORS® all also believe rates will remain under 4 percent through 2020. This means the market won’t be facing any resistance like what was seen at the end of 2018 when rates increased. In our opinion, this as a perfect buying environment.
Housing Inventory Versus Demand Of Homes
The housing market has been hot for the past several years. Year after year, the demand for homes far surpasses the inventory in the marketplace. Due to more demand versus supply, home prices have been increasing year after year. The Federal Housing Finance Agency (The FHFA) has increased conventional loan limits for the past 4 years. The 2020 Conforming Loan Limit cap is now at $510,400. HUD followed FHFA’s lead in raising conforming loan limits. HUD increased FHA loan limits for the past four years. 2020 FHA loan limit caps at $336,760. Experts expect a greater number of homebuyers and higher demand for homes than supply.
Massimo Ressa of Gustan Cho Associates said the following:
We feel that home prices will rise at least 5 percent over the year. Similarly, home value is expected to continue to appreciate. This is due to an inventory shortage and a high demand from buyers. In fact, in 2019, housing inventory dropped overall by 12 percent, while homes available for less than $200,000 dropped by 18 percent. This poses a challenge, especially since millennials and Generation X buyers are flooding the market, looking for low-cost homes. Harney says the best way to avoid issues with this is by listing properties as soon as they become available, especially if they’re in the lower price range.
Fear Of Recession May Impact 2020 Real Estate Market
There was a lot of talk of a recession last year. However, with good economic news reporting quarter after quarter, the fear of a recession seemed to have faded away. Still, many economists and financial analysts have been predicting a recession. This holds especially true during 2020. The Trump Administration and the Federal Reserve Board are very proactive in preventing a potential recession. A recession is not the end of the world. A recession does not trigger a housing crisis. Recessions are part of the economic cycle and happen every five to 8 years. A housing market slowdown is one of the five possible factors that trigger a recession. The real estate market is stronger than ever. There are no signs of a housing slowdown in the near future. A little slowdown in home sales may happen in 2020. This is not because of a weak housing economy but more due to the 2020 elections. Some homebuyers may want to delay buying a home until after the 2020 elections. All signs indicate that 2021 will be one of the best years for homebuyers and the mortgage markets.