What does 2020 have in store when it comes to the U.S. housing market? Many real estate experts project the market to move “sideways,” rather than up or down.
With unemployment and interest rates at historic lows, many people find themselves in a good position to buy a home. However, the market is being slowed by a scarcity of available properties, as fewer new homes are being built and many current homeowners are choosing to stay in their houses longer.
This could lead to a very competitive market in 2020, several experts noted. When good homes do hit the market, bidding wars will happen regularly, which puts sellers in a generally favorable position.
Builder confidence is also at a 20-year high, so we could see a rise in new home construction to help meet the demand for housing stock. Standing in the way are familiar obstacles — rising labor and development costs, as well as diminishing land availability. With the U.S. currently facing a housing deficit of about 1 million homes, it could take some time for supply to catch up with demand, if it ever does.
Ultimately, the real estate market is in a much better place than it was during the recession of the late 2000s, but it’s not all smooth sailing ahead, either. With so many factors pulling the market in different directions, it might be difficult to label 2020 a “good” or “bad” year for real estate when the dust settles 12 months from now. In reality, the answer will likely fall somewhere in between.
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In their forecasts for 2020, most real estate experts anticipate the housing market moving sideways rather than up or down. “Housing appears poised to take a leading role in real GDP growth over the forecast horizon for the first time in years, further bolstering our modest-but-solid growth forecasts through 2021,” said Doug Duncan, Fannie Mae’s chief economist.