Bet On Housing In 2020
It is hard to believe that housing prices will rise yet again in 2020, but that is exactly the prediction of Chapman’s Jim Doti and many other local economists. The culprit, if you wish to call it that, is once again extremely tight inventory. While some expect a brisk spring and selling season, with delighted sellers who previously decided to stay put, rather than accept less for their home if there was a downturn, still others predict not enough housing, even with that slight rise in spring/summer inventory. Therefore, prices should rise, possibly only slightly, but volume could actually drop, even though the volume for November actually rose from the volume of 2018.
More reasons for the rosy outlook; the Fed is unlikely to raise short term interest rates. Even though most home loans are tied to the 10 year treasury, the lead is taken from the Fed’s action or inaction. Stated income loans are expected to increase in 2020 with the loan to value possibly dropping even further. Refinances, which enjoyed a robust 2019 are expected to rise another 50% in 2020 as consumers tap into their equity. Hopefully, most homeowners will do that with care, and not treat their primary dwelling as an endless ATM. That is how the fiasco of 2007 started. Overall, wages are on the upswing and job stability and growth remains optimistic, therefore, if this is your year to make a decision, go ahead. Buying a house actually stabilizes your finances, not the opposite, as people sometimes think, with such a large commitment. But with rent increases on the rise monthly, you can stabilize housing with a home purchase.