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In 2019, national home prices that included distressed sales increased year over year by 3.7% in November 2019. CoreLogic forecasted home prices to rise by 0.2% between November and December 2019. That would be a total of 3.9% nationally for the year 2019.
With the Fed keeping lending rates historically low, mortgage rates have matched that by staying low also and have resulted in lower debt-to-income (DTI) ratios for conventional conforming home-purchase loans.
In turn, new home sales are up in both the southern and western U.S. metro areas due to increases in their population base.
- The current U.S. housing market has recovered from the 2008-2009 financial crisis with home values rebounding above the pre-collapse values.
- We have had a bull market over the past decade, but Zillow® is predicting the housing market could enter a recession starting in 2020.
- Zillow’s prediction comes from their survey of homeowner sentiment and their own outlook on the real estate market.
Housing affordability is a critical issue in almost every real estate market across the country. Research is showing that Millennials do want to buy a home but are putting it off because they are having financial difficulties. However, most of them will be turning 30 in 2020 and it is anticipated that they will become the larger group buying homes into this new decade. Most have got their college degrees and are now a year or two into a good job and earning a good income. They are showing that they watch their spending, and this has allowed them to start paying down their college loan debt and start saving money.
Millennials are expected to take half of all mortgages this year and surpass Generation X and Baby Boomers. Let’s face it, Baby Boomers are heading into retirement and don’t want to add years to their existing mortgages.
The demand for entry-level homes will pick up driven by the younger group of buyers. Experts also believe that 2020 will bring us a flattening of home values which in turn will help fuel these purchases.
Freddie Mac and Fannie Mae are predicting mortgage rates will average around 3.6 to 3.7 percent throughout 2020. It is predicted that there will also be a boost in disposable income due to economic growth and record low unemployment.
Skeptics, like Zillow®, are arguing that there may be a repeat of 2005, but the risk of questionable mortgages is not happening this time around. If there is going to be a crash, it will likely be a small one constrained to only specific markets.
In Greenville SC, Zillow® has shown that our home values are in the normal range and not overvalued or undervalued so any home value increases that we experience will be right in line with a normal real estate market. This also reflects well for first-time homebuyers or those who need to downsize into smaller retirement-sized homes or townhomes.
Victoria Cottle is a Realtor® in the Greenville South Carolina area and if you, a friend or a family member need assistance with selling or buying a home I can help. Referrals and people needing relocation assistance are welcome! Search Single Family homes in Greenville. Search Condos and Townhomes in Greenville.
Please contact Victoria Cottle by email firstname.lastname@example.org or call (864) 275-3953 for your real estate needs in the Upstate of South Carolina!