THREE TRENDS THAT COULD DRIVE HOME PRICES HIGHER IN 2020
According to the National Association of Realtors, home values across the US increased by 5.1%, on average, throughout 2019.
Here are three trends that could cause home prices to continue rising in 2020:
Supply The number of homes available for sale is low in many markets. When the supply is low, sellers typically have more negotiating power than buyers. This means that sellers can ask for higher prices, and buyers may be obliged to pay those higher prices if they really want to purchase the house.
Demand First-time homebuyer demand is likely to increase in 2020 due to demographic trends in the “millennial” segment of the market. Also, the economy is very strong in most parts of the country, causing people to “party like it’s 2006.” These factors point toward strong demand among homebuyers in 2020.
Affordability Of course, housing affordability varies from one individual situation to the next, but recent statistics show that buying a home is still more affordable than renting a home for many first-time buyers. While house prices and mortgage payments may be higher than they’d like to see, these payments are often on par with what they would otherwise pay in rent. As for move-up homebuyers, the home affordability index is near record highs.
Contact me for more information or to run the numbers for your specific scenario.