Surprising Predictions for Real Estate in 2020

Dated: January 21 2020

Views: 32

The 2020 Real Estate Projections That May Surprise You

The 2020 Real Estate Projections That May Surprise You | MyKCM

This will be an interesting year for residential real estate. With a presidential election taking place this fall and talk of a possible recession occurring before the end of the year, predicting what will happen in the 2020 U.S. housing market can be challenging. As a result, taking a look at the combined projections from the most trusted entities in the industry when it comes to mortgage rateshome sales, and home prices is incredibly valuable – and they may surprise you.

Mortgage Rates

Projections from the experts at the National Association of Realtors (NAR), the Mortgage Bankers Association (MBA), Fannie Mae, and Freddie Mac all forecast mortgage rates remaining stable throughout 2020:The 2020 Real Estate Projections That May Surprise You | MyKCMSince rates have remained under 5% for the last decade, we may not fully realize the opportunity we have right now.

Here are the average mortgage interest rates over the last several decades:

  • 1970s: 8.86%
  • 1980s: 12.70%
  • 1990s: 8.12%
  • 2000s: 6.29%

Home Sales

Three of the four expert groups noted above also predict an increase in home sales in 2020, and the fourth sees the transaction number remaining stable:The 2020 Real Estate Projections That May Surprise You | MyKCMWith mortgage rates remaining near all-time lows, demand should not be a challenge. The lack of available inventory, however, may moderate the increase in sales.

Home Prices

Below are the projections from six different expert entities that look closely at home values: CoreLogicFannie Mae, Ivy Zelman’s “Z Report”, the National Association of Realtors (NAR), Freddie Mac, and the Mortgage Bankers Association (MBA).The 2020 Real Estate Projections That May Surprise You | MyKCMEach group has home values continuing to improve through 2020, with four of them seeing price appreciation increasing at a greater pace than it did in 2019.

Is a Recession Possible?

In early 2019, a large percentage of economists began predicting a recession may occur in 2020. In addition, a recent survey of potential home purchasers showed that over 50% agreed it would occur this year. The economy, however, remained strong in the fourth quarter, and that has caused many to rethink the possibility.

For example, Goldman Sachs, in their 2020 U.S. Outlook, explained:

“Markets sounded the recession alarm this year, and the average forecaster now sees a 33% chance of recession over the next year. In contrast, our new recession model suggests just a 20% probability. Despite the record age of the expansion, the usual late-cycle problems—inflationary overheating and financial imbalances—do not look threatening.”

Bottom Line

Mortgage rates are projected to remain under 4%, causing sales to increase in 2020. With growing demand and a limited supply of inventory, prices will continue to appreciate, while the threat of an impending recession seems to be softening. It looks like 2020 may be a solid year for the real estate market.

Blog author image

William Flowers

I have grown up in the Memphis area for the majority of my life and grew up going to Germantown Baptist Church as a kid. My relationship with Christ has given me a deep desire to help my community and....

Latest Blog Posts

Best First Time Buyer Neighborhoods Part 2: 38117

Want to purchase your first home in East Memphis but don't know where to look? 38117 is one of the best zip codes in all of Memphis with ample opportunity for first time buyers, move up buyers, and

Read More

Best First Time Buyer Neighborhoods Part 1: 38119

There are so many great neighborhoods for first time buyers in the Memphis area and 38119 is one of the most affordable zip codes in all of Memphis. Since January 1st of 2019, 543 homes priced

Read More

Is Moving The Boost You Need?

Why Moving May Be Just the Boost You NeedAs we look back over the past year, we’ve certainly lived through one of the most stressful periods in recent history. After spending so much more time

Read More

The Difference Between An Appraisal and Inspection

What’s the Difference between an Appraisal and a Home Inspection?If you’re planning to buy a home, an appraisal is an important step in the process. It’s a

Read More