You’ve been searching and saving for months — or maybe even years. Will 2020 finally be the year you buy your first home? Whether you are selling, buying or staying put, here’s what you need to know before buying your home in 2020.
The conditions seem right: Interest rates are much lower than the 5% to 5.5% rates forecasters anticipated last year, and the economy is still going strong. But you’re not the only one wanting to buy and there aren’t a lot of homes to choose from.
“In fact, the supply of available entry level homes is approaching historic lows, according to Realtor.com. Annual median real estate prices are expected to continue to climb by 3.6%, according to a group of economists surveyed by the National Association of Realtors.
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Real Estate Trend #1: Home Prices Are Still Rising Slowly
Okay, let’s start with home prices. Overall, home prices grew slower in 2019 (3.3%) than in 2018 (5%). And this year seems like it will be no different. In fact, real estate gurus predict that home prices will only rise by 2.8% in 2020.2 So, you’ll likely see home prices continue to creep up, but they probably won’t knock your socks off with rapid growth like we’ve seen in previous years.
Real Estate Trend #2: Mortgage Interest Rates Are on the Decline (for Now)
Mortgage interest rates have been going down in 2019—steadily dropping below 4% for common types of loans. In 2020, economist geeks think interest rates will stay around 3.7% for a 30-year mortgage and 3.2% for a 15-year mortgage (the only type of mortgage we recommend). In 2020, economist geeks think interest rates will stay around 3.7% for a 30-year mortgage and 3.2% for a 15-year mortgage (the only type of mortgage we recommend). But this is never a guarantee because things like tariffs and trade wars might gradually shift the economy, which could result in the Federal Reserve slowly increasing interest rates to balance things out.
Real Estate Trend #3: The Majority of Home Buyers Are Still Millennials
That’s right, our final trend is about who is buying homes. And once again, millennials took the lead as the largest group (37%) of home buyers last year.
What is a millennial exactly? Well, the nerdy answer is anyone born between 1980 and 1998. The easiest way to spot a millennial home buyer? They can’t wait to post a pic of their new home on Instagram!
What If I’m Not Buying or Selling a Home This Year?
You may be thinking, All this is great, but I’m not going anywhere anytime soon. We hear you, and here’s what you should know for now:
1. Equity is unlikely to decrease through 2020.
With most housing markets at low risk for a downturn, the 2019 Housing and Mortgage Market Review estimates home prices will continue to rise for the next couple of years. Woo-hoo for sellers! If you sell your house before 2022, you’ll likely still make a nice profit. Continue to monitor how much your home is worth to make sure your equity (what your home is worth minus how much you owe on it) is going up.
2. From what we can see, the real estate market is not going to crash.
With price growth slowing down, some folks are wondering if the housing market could collapse again. Well, it’s impossible to know for sure, but a number of factors indicate a housing crash is unlikely—as long as tariffs and trade wars don’t cause a dramatic ripple effect. But economists say we seem to be in good shape since people are spending money and new job opportunities keep popping up.
3. Regardless of your neighborhood, buyers are interested.
Since home prices have experienced rapid growth over the past few years, some buyers may be less choosy. In fact, determined ones might be willing to consider neighborhoods that don’t have easy access to highways or aren’t in close proximity to a big city. If you think you live in an unpopular neighborhood or believe your home isn’t what buyers are looking for, think again. Now may be your perfect time to consider selling.
Thinking of Selling? Guaranteed Cash Offer on Your Home Within 24 Hours. Ask Me About My Guaranteed Sale Program. For more details, call me direct at 864-942-8991.
- We have over 12,428 buyers in waiting.
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To discuss the sale of your home, call Kellar at 864-942-8991 and start packing!
