What Will 2020 Bring for the Housing Market?

Although 2020 is not going to be a relaxing walk through the park, housing experts say that the industry is in a much better position than it was coming into the 2010s. Low interest rates, high demand, and a strong workforce will all keep builders busy trying to supply enough houses in the new year. Still, some expect home value growth and refinancing levels to slow, and the inventory shortage is larger than builders can manage. Here are predictions for 2020 by some of the leading industry experts.

A strong job market and low mortgage rates should sustain the housing market in 2020. The problem will be finding enough homes for buyers.

With unemployment hovering at a 50-year low and interest rates well below historical norms, the real estate industry is being dragged down by scarcity in housing stock, especially at lower price ranges. Not enough homes are being built, and homeowners are staying put longer, creating a bottleneck.

Still, the market is on better footing than it was a year ago, when economic uncertainty caused by global trade tensions, stock market volatility and a government shutdown, along with rising mortgage rates and home prices, put a damper on sales. Mortgage rates, which seemed poised to surpass 5 percent, a level they hadn’t reached since 2011, retreated in 2019. The average rate of the most popular mortgage, the 30-year fixed, has remained below 4 percent the past 32 weeks, according to Freddie Mac data. At the start of 2000, it was 8.5 percent.

In their forecasts for 2020, most real estate experts anticipate the housing market moving sideways rather than up or down.

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