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The U.S. housing market can be difficult to predict, but as we start 2020, two things are clear: Buyer demand is strong, and the housing inventory is bottom of the barrel low—the lowest it has been in 20 years. The market traditionally heats up in spring, but it has recently picked up the pace to create a competitive market even before the Super Bowl. With the increased demand and lower inventory, experts expect home prices to rise, which is something we have already gotten a taste of this first month of the year. Altogether, these conditions will create a competitive market that will most likely only intensify as 2020 progresses.
The U.S. housing market is off to a strong start in 2020 as a deepening shortage of homes for sale and surging homebuyer demand are set to push prices up at the fastest rate in years. Buyers may be coming out of winter hibernation early, but so far the sellers are few and far between, which is setting the stage for intense competition even as the year has just begun.
Redfin CEO Glenn Kelman has previously called Super Bowl weekend “the weekend where the housing market either goes crazy or it takes a nap.” This year, we may not need to wait until game time to see how the housing market is playing out. Homebuying demand is spiking in January as many potential homebuyers are turning into active homebuyers well in advance of the typical spring peak homebuying season.
Unfortunately, the supply of homes for sale has so far been unable to keep up with surging demand. Recent data from the National Association of Realtors show December housing inventory at just 1.4 million units—the lowest level in at least 20 years. Low mortgage rates could also be to blame for the shortage of homes for sale, as homeowners are content to sit on their cheap mortgages rather than list their homes, even when they choose to move up to a larger house.
