In 2019, the housing market consisted of reduced mortgage rates, large demand, and tight inventory. In 2020, it is heavily predicted that these conditions will continue to intensify making real estate more competitive for the upcoming year.
Lower Mortgage Rates
Mortgage rates are strongly dependent upon the current state of the economy. Increased consumer spending, rising incomes, and job growth have led to a healthy, thriving economy, with no plans on slowing down. Correspondingly, mortgage rates will continue to drop as in previous years.
Lower interest rates are ideal for those wanting to purchase homes, as it cuts down the barriers to enter into the market. Additionally, lower rates increase home affordability, allowing buyers to purchase with confidence.
Although low mortgage rates make homeownership more appealing, buyers should anticipate limited inventory. There are many current homeowners staying put, rather than selling and upgrading to better homes.
In an effort to loosen inventory, development of real estate is on the rise. New construction in new neighborhoods is quickly being built to broaden home supply and to steadily increase total home sales.
Lawrence Yun, Chief Economist of the National Association of Realtors predicts new-home sales surging 11%. Whereas, existing home sales may increase by 3.7% in 2020.
Rising Home Costs
The boost in new construction has yet to exceed ongoing demand. As a result, homes are gaining value.
In their 2019 housing market forecast, the National Association of Realtors expected the median existing-home price will rise, 3.1% to around $266,800 in 2019. As 2020 quickly approaches, NAR predicts another climb to about $274,000.
More Millenials Entering the Market
Who is driving up housing demand? An influx in Millennials seeking homeownership. This demographic possesses a strong buying-power and interest to match. Recognized as the most-educated generation, many feel they are both financially and psychologically ready to purchase their first home, especially in the new year.
The Millennials’ positive impact on the housing market was listed on our 2019 real estate market predictions. We continue to look forward to their contributions well into 2020.
2020 Greenville Real Estate Trends
To gain the best understanding of how real estate trends will affect you, it is best to look local. According to Zillow, Greenville, SC shows signs of a healthy 2020 real estate market, projecting a 4.5% home value increase.
Even though home values are rising, buyers are to remain in a warm, sustainable real estate environment with housing costs remaining affordable in the next year.
Our real estate experts at The Parker Group are excited to work with you. While considering your homeownership goals, contact our team to understand how they may be impacted by 2020’s real estate trends.