Original Article in Builder Online
Redfin has come out with its new predictions for the 2020 housing market with the expectations that bidding wars will return after an 18-month hiatus. What does that mean for the real estate market?
Daryl Fairweather, Redfin Chief Economist stated: “Low mortgage rates started to revitalize the market at the end of this summer, but we won’t see their full impact on demand for housing until next year. In 2020, buyers will have fewer homes to choose from than they have in five years. But the return of bidding wars is good news for sellers who may have been holding out this year as the market stabilized. The competition and faster price growth will tempt more homeowners and builders to list homes, which will help improve the balance between supply and demand by the end of the year.”
Here are a few of their predictions:
Bidding wars will rebound thanks to low mortgage rates and a lack of homes for sale
Low mortgage rates will continue to strengthen home buying demand, but due to a lack of new homes for sale and homeowners staying put longer, there will be fewer homes on the market in 2020 than in the past five years. More demand and less supply mean bidding wars will rebound in the first quarter.
30-year fixed mortgage rates will stabilize at 3.8%
Throughout 2020, 30-year fixed mortgage rates will remain low, hovering around 3.8%. Faced with slowing economic growth, the Federal Reserve will keep interest rates low. Although the housing market is strong, weakness in other sectors, like manufacturing, is pulling down on the economy.
For the first time, Hispanic Americans will gain more wealth from home equity than white Americans
In the next decade, Hispanic Americans will, for the first time, gain more home equity than white Americans. That’s because the majority of new homeowners are Hispanic, and home values in Hispanic neighborhoods are increasing faster than in white neighborhoods. There are more Hispanic homeowners in Texas than in any other state.