Today, let’s take a look at what the experts—the National Association of Realtors, Freddie Mac, and Fannie Mae—say to expect for the market this year. This information is invaluable in helping you make your decisions about buying or selling homes this year.
1. Mortgage rates. Experts believe that rates will remain stable throughout the year. Since they’ve remained under 5% over the last decade, we may not fully realize the opportunity we have right now. Rates are projected to say in the mid- to upper-3% range, which, compared to the averages of the last four decades, is very low.
2. Home sales. Three of the four market experts believe that homes sales will increase this year; the fourth thinks that they’ll remain stable. With mortgage rates remaining near all-time lows, demand should not a challenge—the lack of available inventory, however, may moderate the increase in sales. Last year in Colorado Springs, over 1,600 homes sold on the market. That wasn’t a record year, though, believe it or not, but it was still a robust year for the area.
3. Home prices. Six different expert entities who track home values say that values will continue to rise in 2020. The Mortgage Bankers Association gave the most conservative increase at just 3.1%; CoreLogic predicts a 5.4% growth. Four of these six experts predict that home price appreciation will increase at an even great pace than 2019. In Colorado Springs, the average price of a home is currently $364,000, which is up by about $24,000 over 2019.
Now, here’s the big question: Is a recession possible?
This same time last year, many were predicting that a recession was coming and that interest rates were going to rise—thank goodness neither of those came true!
In 2019, a manager from Goldman Sachs said, “[…] markets sounded the recession alarm this year, and the average forecaster now sees a 33% chance of a recession over the next year. In contrast, our new recession model suggests a 20% probability. Despite the record age of the expansion, the usual late-cycle problems—inflation and overheating financial imbalances—do not look threatening.”
Here’s the bottom line: Right now, mortgage rates are predicted to stay below 4%, which will cause the number of homes sold to increase. With a growing demand and a limited supply, it’s still going to be a challenging time to buy a home.
But if you’re a seller, this year will be a great time to list your home. We’re still looking at an increase in depreciation due to the recession, but that’s nothing to get too worried about.
If you have any questions about what we can expect from real estate in 2020, or if you’re planning to buy or sell a home, keep me in mind. We’re here to help you succeed, no matter your goals.