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    The 2020 Real Estate Projections That May Surprise You

    The 2020 Real Estate Projections that May Surprise You This will be an interesting year for residential real estate. With...

    • Juan Murray
    • June 13th, 2019
    • 3 min read

    The 2020 Real Estate Projections that May Surprise You

    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 rates, home 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:

    Since interest 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:

    With 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: CoreLogic, Fannie Mae, Ivy Zelman’s “Z Report,” the National Association of Realtors (NAR), Freddie Mac, and the Mortgage Bankers Association (MBA). 

    Each 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 that predicting a recession may occur in 2020. Also, a recent survey of potential home purchasers showed that over 50% agreed it would happen 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 a 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.

     

     Courtesy of Simplifying the Market 

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    About the author

    Juan Murray

    (617) 721-0961
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    Juan got his start in the residential real estate market in 1994 and has never looked back. His mission is to provide excellence to his clients, and he is always looking for ways to improve the real estate experience for his clients and colleagues in the industry. Early in his real estate career, he worked as the Housing Rehabilitation Director for a national non-profit organization, Neighborhood Assistance Corporation of America (NACA). His goal was to gain more knowledge of the construction and renovation of existing homes in conjunction with working with 1st-time buyers. He effectively managed over 25 residential construction project managers on the East & West coasts while implementing procedures to improve communication between contractors, property owners, and banking representatives. He also developed resources, designed processes, and organized all aspects of real estate property acquisition and renovation. Juan completed a home inspector licensing course on his way to becoming a licensed home inspector. But after completing 30 inspections as an apprentice observer, after crawling under numerous porches and “crawl spaces,” he decided it wasn’t his cup of tea. Juan has always had a sharp eye for market trends and an innate understanding of what his clients need. That’s why, as a top real estate agent in Boston, he is constantly ahead of the curve, anticipating changes in the market and helping his clients manage their real estate goals. His keen intellect, quick wit, and tireless work ethic make him an invaluable partner for anyone looking to buy or sell property in the Boston area (or via his referral partners worldwide). Although Real Estate is a large part of his life, it is not the only part. He loves hanging out with family and friends, being in the kitchen, enjoying great food, anything Apple or Cole Haan, gadgets, great cigars, F1, motorcycles, photography, and traveling (to name a few). He lives with integrity and tries not to take life too seriously.

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    Juan Real Estate Group

    Juan Real Estate Group

    769 Centre St, Suite 209, Jamaica Plain, MA 02130

    769 Centre St, Suite 209, Jamaica Plain, MA 02130

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    [email protected]

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