Happy New Year! The start of the year is always when experts reach for their crystal balls and forecast what trends the housing market will see. Basing their expectations on current trends, expert predictions can offer some insight into the twists and turns of real estate, although sometimes things don’t roll out quite as planned!
Let’s take a look at where we might be headed this year:
A Great Rate
One factor buoying up house hunters right now is the great mortgage rates available. Low interest mortgages make financing a home more affordable. With mortgage interest rates holding steady below 4%, buying a home makes sense, and may be a great deal compared to if mortgage rates rise.
Last year, forecasters thought that mortgage rates were on a trajectory to rise, potentially above 5% and predicted this would cause some drop off in home buying. However, rates stayed low and home shoppers continued to take advantage of this lucky break. With low mortgage rates, homebuying continued at a steady rate.
Anyone looking for a home right now would have a hard time beating the current mortgage rates, and we certainly don’t recommend waiting for them to drop lower. While rates are predicted to stay low, they probably won’t be reduced anytime in the near future.
A Tighter Market
By many accounts, although housing construction has been booming, the industry will probably slow down a bit in the year ahead. Slight rises in interest rates, uncertain trade tariffs on materials and other shifts in the market mean that new home construction has been rebalancing itself and will probably continue to do so. Home buyers shouldn’t get discouraged by this trend, however.
While slowing home construction won’t make finding the right house easier, especially in competitive markets with housing shortages, there are interesting shifts in the balance of new home construction. In a market that has primarily been focused on building new luxury homes, new construction is now starting to trend toward pragmatic and affordable entry level homes for first time home buyers. In part, the shift toward starter home construction is driven by the housing needs of millenials
Millennials aren’t the only ones pulling the strings of the market, however. Baby boomers are undergoing significant housing changes as well. Many “empty nest” boomers are downsizing their housing needs and putting more family-oriented housing back on the market.
Market demands are causing home prices to level off a bit, with more expensive luxury properties taking longer to sell. Large and steady rising home costs are finally having to reckon with slowing salaries and economic growth that can’t afford inflated prices. There is some indication that as home prices deflate, some homes will leave the market, to try to wait for an upturn in housing prices.
Time Will Tell
The housing market seems to be on track to have a solid year in 2020 full of steady growth. While low interest gives shoppers a distinct advantage in making their home purchase financially smart, sellers also have reason to be optimistic, as the supply of homes on the market may slow.
Predictions in the housing market can point the way, but ultimately, the right time to buy a home is when you are ready. Saving for a deposit, getting your finances in order and being ready to settle down in a home you love are always good indicators that this is a good year to buy a home. Feeling the urge to start looking for your new home? If it is your first time buying a house, sit down with your banker and talk about what to expect and what you can afford.
In beautiful Lake Carroll, it is always a good year to buy a home. Lake Carroll is a vibrant community based around Illinois’ largest private lake, set in idyllic rolling hills and midwestern woodlands. From skiing to fishing, Lake Carroll has year-round outdoor fun in the works, as well as a bevy of local clubs and organizations to get involved in. Take advantage of the beautiful surroundings and relaxing pace of life in a place you will be truly proud to call your home.
Amazing houses come onto the market for Lake Carroll year-round, and nobody knows the market like Fawnridge Realty. Whether you’re looking for the ideal place to raise your family or the perfect spot to retire, the home of your dreams is waiting for you in northwestern Illinois!