In 2019, interest rates dropped, the housing inventory stayed low, and the real estate market continued to heat up. Will these same trends continue into 2020? Or will new trends take their place? The following are three trends likely to shape the housing market in 2020.

Baby boomers are ready to sell. A study recently published by Zillow found that baby boomers are getting ready to sell approximately 27% of homes in the United States between now and 2040. Most of these older homeowners are looking for new, low-maintenance homes that have smaller yards to maintain and fewer stairs to manage.

More inventory will lead to more millennial homebuyers. As baby boomers get ready to sell, another generation is waiting to take advantage of this new selection of inventory. Contrary to popular belief, the majority of millennials want to own their own home instead of renting an apartment. In a study done by Chase Home Lending, 70% of millennials said they would be willing to cut back on their nonessential activities to save money for buying a home.

One significant factor that has been holding millennials back from homeownership is the low inventory in the housing market. While cities across the country have witnessed good job growth, the housing inventory hasn’t been able to keep up. This has created a notable lack of affordable housing. While young buyers have the earning potential and job security to purchase a home, they don’t have many housing options at their price point.

New construction will boom. Since the real estate market has a lack of inventory, many potential homebuyers will consider new construction properties. In fact, the Economic and Strategic Research Group at Fannie Mae predicts that homebuilders will increase their production by 10% in 2020.

Sources: Forbes.com, Zillow

I’ll continue to monitor economic reports closely, but if you have any immediate questions, please call or email today.

We are ready to help you find the best possible mortgage solution for your situation. Contact Sheila Siegel at Synergy Financial Group today.