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Forecast for US Housing Market 2020 to 2024
We’re on the brink of 2020, and with it an opportunity to push the reset button. We hope with consumer spending, booming stock market, excellent job outlook, that the housing market will pick up in 2020.
It might require a little help from the President who has a lot on his hands lately! But so far, he hasn’t paid much attention to it. That has to change if the economy is to improve, and for stock markets to sustain their record heights. Housing creates an economic boost of its own.
“Housing appears poised to take a leading role in real GDP growth over the forecast horizon for the first time in years, further bolstering our modest-but-solid growth forecasts through 2021,” said Doug Duncan, Fannie Mae’s chief economist.
A Potential Crash Still Worries Investors
There are contrasting viewpoints however that high home prices suggest a housing bubble. Any shock within the financial system, or economy (trade war China) could lead to market collapse. The likelihood of the housing market crashing is slim. You can see the supporting housing stats below from all the major data providers. It’s solid.
Still your concern about threats is not unwarranted. The wise educate themselves.
Demand for homes and condos was consistently strong in 2019, and will grow in 2020. However supply of affordable homes is the key issue. Supply will be the story for 2020 and the lack of homes is expected to drive sales down by almost 2%. Realtors may see more bidding wars.
The US consumer looks solid right now, and with the President looking like he’ll be re-elected in 10 months, economic optimism could rocket. A forecast for 7% price growth nationally isn’t out of the question. Corelogic says 5.8%. If you wait another year to buy, you’ll be paying $15,000 to $30,000 more for a house. That’s a lot of money.
See more insight on the major California housing market and Florida housing market forecasts. Looking for specific city housing markets? See Bay Area housing, Los Angeles housing, San Diego housing, Sacramento housing, Seattle housing, Atlanta housing, Philadelphia housing, Boston Housing, New York housing, Chicago housing, and Miami housing reports.
Mansion Global in its report says Millennials will drive the market in 2020. 4.8 million millennials are reaching 30 years of age, and are ready to buy. Many will be moving to the suburbs away from their small city apartments. In November you can see Millennial buyer demand has already been building.
Kiplinger in its report suggests shortages will grow as builders can’t get financing from banks. They point out that housing inventories are down 10% to 30% in many cities. They believe prices will rise 6% for the next few years.
NAR’s November Housing Sales Report
NAR reports a healthy growth in sales of existing homes (up 2.7% from November 2018). Most of that was for homes priced $250k to $750k. November’s existing-home sales reached a 5.35 million seasonally adjusted annual rate. Last December and January were horrible months, but this year, sales are stronger. In California, sales are picking up strongly while prices are still subdued.
Year over year in the West, home prices grew more than $27,000 while in the Northeast, home prices increased by about $11,000.
Total existing home sales fell 1.7% in November (seasonally adjusted) while prices rose only $300 on average from October. First time buyers and all cash sales rose about 1% from October.
Inventory is the Big Concern
November’s housing inventories fell 7.3% from October. There are 1.64 million homes for sale which is down 5.7% from October of 2018. The trend is strong with now 5 consecutive months of year-over-year inventory declines (lowest November inventory figure since 1999. Without plenty of new construction, the lack of listings should cause prices to rise much more than 2019.
New Construction Permits
According to NAHB, nationwide housing starts rose 13.7% in October to a seasonally adjusted annual rate of 1.29 million units. Single-family starts rose 5.3% in October to a seasonally adjusted annual rate of 877,000. Year-to-date, single-family starts are 8.4% higher than YoY period. Multifamily starts jumped 36.8% to 413,000 units from September’s weak numbers.
All good news, however much of the production is not in the target range of most buyers.
|Construction Starts – Major Cities||Single Family Homes|
|Time Period||Nov-19||Nov-18||% CHG||2018|
|Atlanta-Sandy Springs-Marietta GA||24,075||24,602||-2%||26,500|
|Dallas-Fort Worth-Arlington TX||32,383||34,241||-5%||36,800|
|Houston-Baytown-Sugar Land TX||36,819||37,663||-2%||4050|
|Las Vegas-Paradise NV||8,773||9,123||-4%||9700|
|Los Angeles-Long Beach-Santa Ana CA||8,303||9,314||-11%||10,042|
|Miami-Fort Lauderdale-West Palm Beach FL||6,594||6,564||0%||7,000|
|Milwaukee-Waukesha-West Allis WI||1,428||1,638||-13%||1,730|
|Minneapolis-St. Paul-Bloomington MN-WI||8,654||8,344||4%||8,900|
|New Orleans-Metairie-Kenner LA||2,944||2,771||6%||3,050|
|New York-Northern New Jersey-Long Island NY-NJ-PA||10,881||9,346||16%||11,000|
|San Antonio TX||8,411||7,576||11%||8,000|
|San Diego-Carlsbad-San Marcos CA||2,824||3,352||-16%||3,490|
|San Francisco-Oakland-Fremont CA||3,510||3,728||-6%||4,050|
|San Jose-Sunnyvale-Santa Clara CA||2,358||2,267||4%||2,466|
|St. Louis MO-IL||4,823||4,944||-2%||5,248|
|Tampa-St. Petersburg-Clearwater FL||13,626||13,344||2%||14,200|
New Construction Permits -Data courtesy of NAHB
New Home Sales US
Some bad news comes from HUD which reports construction starts were down 9.4% in September, and housing completions fell 9.7 %. Single housing starts fell 8.6% in September. This might be why some experts are forecasting higher prices for 2020 and for the next 5 years.
They’re starting to believe in the strength and persistence of the US economy, yet see that construction will never keep up to demand.
NAR’s Lawrence Yun, reiterated how low interest rates, continuing job expansion, higher weekly earnings and low mortgage rates are encouraging home sales. New housing construction starts rose in October too, the highest levels since 2007.
Residential starts grew 3.8% to 1.31 million (annualized basis). Single-family home starts rose 2% to 936,000 in October.
The forecast for new construction starts is at a 1.46 million unit pace. Multifamily starts rose 2% in October, the fastest pace since 2007. Multifamily starts grew 8.6% while permits for future units grew by a hefty 8.2%.
There are still fears of a housing market crash, spawned by fears of a stock market crash and slowing global economy. Yet, the US economy continues on very well and the global economy is recovering. As I’ve been forecasting for a long time now, economic and political factors point to a potential bull market in the US starting in 2020, together with low interest rates, although not good conditions for China (Trade deal looks on thin ice, and will likely not hold).
With tax breaks ending for high end homes, sales of luxury homes should moderate further. However, sales of high end homes is up in Florida and California. NAR says the hottest cities nationwide were Columbus, Ohio; Boston-Cambridge-Newton, Mass.; Midland, Texas; and Sacramento and Stockton-Lodi, California.
See more on the California housing market, Florida real estate market, Los Angeles housing market, San Diego housing market and a thorough report on US housing on the ManageCasa property management software’s website.
Total housing inventory at the end of October was 1.77 million units. This is a drop of 2.7% from September and down 4.3% from last October (1.85 million units).
Housing Starts Outlook Brightens
Builder confidence fell slightly in October, but the new construction stats were the best since 2007. Homebuyers are not as depressed about the outlook. as they see some opportunities to fulfill frustrated demand in the affordable homes market.
Multifamily construction grew strongly, above 8%. If trade deal worries ease and business confidence grows, the spring market could be a hot one.
Forecast for New Residential Home Construction Next 5 Years
Statista suggests home building will decrease in 2020, and perhaps thereafter with reduced supply, housing prices will rise once again fueling builder intent.
With 1.68 million homes available, buyers are waiting for the best time to buy. A NAR survey recently suggested that right now may be the best time to buy.
Why would buying this winter be a wise choice?
- low interest and mortgage rates
- new housing construction dropping
- lots of new construction being released
- recent economic data is positive
- large number of homes now on the market
The chart below from Advisor Perspectives shows how lasting the last recession was, and that confidence and buying intent still is on the mend. With the recent economic setback overcome, consumer confidence should increase.
2020 Housing Factors Positive
The Job market forecast is excellent with unemployment falling to a persistent 3.6%. And mortgage rates are forecast to fall. S&P CoreLogic predicts home prices will rise 5% in the next 9 months. The hottest cities now are Midland, Texas; Chico, California; Colorado Springs, Colorado; Spokane Washington; and San Francisco-Oakland-Hayward, California. Recession fears are causing some to think now is the time to sell.
Will the big markets in Florida and California bloom or will the smaller cities continue to draw workers, construction and home purchases? At this point, both look possible. More is better when it comes to housing, so a transition of workers and immigrants to the heartland could have more beneficial effects than many might expect.
This new update and projections for the 2020 to 2024 5 year forecast period ahead for the US housing market offers key facts, data, perspective, predictions, price factors, expert opinion and forecasted trends from top sources such as NAR, Trulia, Freddie Mac, Zillow, Case Shiller, Trading Economics, and more.
Although worries of a housing crash persist, a housing hungry Millennial middle class, and powerful economic performance will any outweigh housing crash indicators. As you’ll see in the charts, videos and opinions below this market is an interesting phase.
This United States Housing Report is the most widely read and thorough update/prediction for 2019/2020, and other housing and economic data to 2026. Please bookmark for coming fresh updates!
Looking for specific sales stats and predictions for major cities: Los Angeles, New York, Atlanta, Seattle, Chicago, Philadelphia, San Diego, Miami, Boston, Bay Area, Tampa Sarasota, Denver, and Houston. See forecasts for California housing, and Florida housing markets.
Mortgage Rate Forecast
It’s true, mortgage rates are forecast to fall and there’s some good deals for home loans and refinance loans. According to the latest Freddie Mac report, the average rate for a 30-year, conventional, fixed-rate mortgage decreased to 4.64%.
Check out more on the mortgage rate forecast for US lending institutions and firms including Lendingtree, USBank, Bank of America, Quickenloans, Zillow Home Loans, HSBC, WellsFargo, Loandepot, Chase Bank, and more.
Why Will Rates Fall, and When Will They Rise Again?
Should you buy or refinance now? The forecast is for lower mortgage rate quotes. We may get back to rates as low ast 3.6%. Lower income buyers would be struggling to buy at current prices and as affordable homes hit the market, they can finally buy.
The democrats are promising to dry up all stimulus money and block President Trump any way they can. This conflict is critical to discouraging housing demand and threaten an economic recession.
Despite poor sales across the nation, particularly in the California housing, Attom Data reports homes are becoming even less affordable (prices outpace wages). Employment and wages are better in California, yet prices are still out of reach for most.
Will Home Prices Fall or Rise?
The Forecast: S&P CoreLogic predicts home prices will rise 5% in the next 7 months. And average monthly mortgage payments could rise from $912 last fall to $994 this September 2019.
In fact, Zillow reports the average price of US resale homes in October at $222,000. Zillow forecasts continued upward pressure on sales prices, rising $12,000 (6.4%) more by late 2019. It seems it would take a major economic shock or failure to slow the house price trend and crash the housing markets.
Last month NAHB chief economist Robert Dietz: “While home price growth accommodated increasing construction costs during this period, rising mortgage interest rates in recent months coupled with the cumulative run-up in pricing has caused housing demand to stall.”
NAHB’s housing-market index dropped 8 points to a reading of 60 in November, well below economist’s expectations. Despite a positive economic forecast, and strong rental price growth and stock market outlooks, it is rising mortgage rates and political uncertainty that is casting gloom over the 2019 period for housing.
Which are the most expensive cities to buy a home? San Jose, San Francisco, Los Angeles, and San Diego. Cities with the worst negative equity include Chicago, Las Vegas, Virginia Beach, Baltimore, and Memphis. San Jose and San Francisco lead the way in positive equity. You’ll find better deals in Philadelphia, Atlanta, Chicago, and Houston. See the California housing market predictions, Florida housing predictions , Illinois housing market and New York housing predictions in more detail.
What’s Ahead for 2020?
The fall elections and 2020 Presidential elections are on people’s minds. Everyone’s eager to buy or sell at the right time and a Trump defeat could send both US stock markets and housing markets crashing. The best guess is that Donald Trump will win narrowly in 2020 and keep protecting fragile US business startups.
However, new housing construction starts fell by 12% in June and multifamily dropped significantly. Post free trade adjustments, higher mortgage rates, and economic uncertainty will reduce new home building. Lumber prices have dropped fast, however home prices are predicted to keeping rising. Good news for sellers.
Housing Market Synopsis: The US real estate market continues to grow with rising prices, new construction, supported by a strengthening domestic economy. President Trump as plenty of options to boost the economic forecast and city housing markets from California to Texas to Florida. It is a sellers market across the country, with persistent, buyer demand, despite gloomy housing crash forecasts for the last 4 years which missed the mark.
Check recent house prices in Los Angeles, San Francisco, San Diego, Sacramento, Denver, Chicago, and Atlanta. Also see how the Seattle, Houston, Miami, New York, Boston, Philadelphia and Orlando/Tampa housing markets are predicted to perform this year.
S&P Dow Jones Indices Managing Director David Blitzer says. “Home prices are up 54%, or 40% excluding inflation, since they bottomed in 2012. Reduced affordability is slowing sales of both new and existing single-family homes.”
The dwindling numbers of homes for sale are expected to push prices upward in Los Angeles, Philadelphia, San Diego, Boston, Atlanta, Chicago, Houston, Denver, Las Vegas, Dallas, Seattle, New York and and in Florida. It’s all driven by a wildly successful economy and a resistance by local and state governments to support home development in their jurisdictions.
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What’s Driving the California Housing Market?
Check out the California housing market forecast, which has a strong latent and active demand from an eager demographic.
Take a look at more detailed reports of major US city markets: Florida Housing Forecast 2020 | Sacramento Housing Market | San Francisco Housing Market | Boston Real Estate Market 2020 | Miami Housing Market | Los Angeles Real Estate Forecast | Chicago Housing Forecast | New York Real Estate Predictions | Houston Market Forecast | Philadelphia Real Estate Market | Seattle Housing Report
Despite the market correction, experts feel this bull market could continue as long as business keeps coming back to the US. That’s a long process of repatriation. In the meantime, the US economy, low jobless rate, wage growth, investment, strong dollar, and profit growth are giving real estate participants a lot of optimism.
The US Economic Progress to 2020
These stats from Trading Economics show positive US economic fundamentals that will drive growth in the housing market, and in turn will bolster the economy, since new household consumer spending and housing investment is a key driver of the economy.
As President Trump’s Tax cuts wind down, the Fed has raised interest rates twice in 2019. It’s just one of the issues sparking stock market volatility. Is it enough to scuttle optimistic stock market predictions? No one is quite sure if its a crash or continued booming cycle. More forecasts though are for a good economy, strong home sales, low unemployment, and a well performing stock market.
Buyers and sellers will enjoy reading the market trends, stats, threats, and the key factors including housing construction starts described below. Enjoy the big picture! Scroll down to see the stats, video, and charts on the strongest cities where you might buy or invest. And when is the best time to buy a house?
Inflation, Labor Shortages, and Building Supplies
Labor shortages, rising mortgage rates, and higher lumber costs are looming which could mean house prices will rise. With nowhere to go, homeowners are resisting selling. The hope that the resale market will come to the rescue might be unrealistic and and perhaps even fewer resale houses will be for sale.
Hottest Cities for Investment Value
This chart from NAR shows where employment growth is strongest and the ratio of recent employment growth to homes being built. That’s a great stat for rental property investors looking for investment income in the best cities.
Compare that to wage growth and actual price appreciation. Again the Bay Area shows the best outlook for employment which has to be your top signal. However, rising oil and gasoline prices and predictions for more, Texas may be your hottest state going through the summer.
What’s also a good omen is what you’re going to read in this post. It may help you do many things in 2019, from finding employment (see the US Jobs forecast), to understanding politics, discovering high performing best investments 2020 to researching the best cities to live or buy houses or property in.
Interest in rental income investment and apartments is particularly strong now in places like Miami, Dallas, Seattle and San Francisco. The Los Angeles housing, San Diego housing, San Francisco Bay Area housing markets are just a few to look at. Seattle, Denver, Boston, South Florida, Palm Beach, Philadelphia and New York have a promising outlook too.
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If construction rates do moderate, prices in the hot markets of Miami, San Francisco, Los Angeles, San Diego, New York, Boston, and Phoenix should rocket to all time highs but what is the risk of a housing market crash? House Renovation too is at an all time high in expenditure and this might have an impact on new housing starts.
US Housing Starts to 2024
There you have a quick graphical synopsis of factors that will support a strong US real estate market for 4 more years.
What’s Your Forecast for the next 5 Years?
What’s the forecast and trends for the next 5 years in your region? If you’re in Miami Fort Lauderdale, San Diego, San Francisco, Atlanta, Tampa, and many other US centers, you’re probably grinning from ear to ear.
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