As 2020 begins to unfold, many Americans across the nation are gainfully employed with an Unemployment Rate currently at a 50-year low of 3.6%. Expectations are for the index to push even lower to 3.25% by year-end, matching lows last seen in 1953. A recent report from the National Federation of Small Businesses showed that optimism among small business owners is just below all-time highs. Also, employers continue to search for qualified workers to fill key positions. Furthermore, business owners are expecting increased sales and earnings, and higher wages for employees … all strong points to ensure that recent positive momentum for housing will continue in the months ahead.
The Census Bureau recently reported that the homeownership rate rose to 65.1% at the end of 2019, the highest level since December 2013. The Fannie Mae Home Purchase Sentiment Index is near all-time highs reflecting that it is a good time to both buy and sell a home. The New York Federal Reserve announced that $750 billion in new mortgages were originated in Q4 2019, more than any quarter since Q4 2005. And why have these positive factors come into play? A strong labor market!
Those factors alone would be enough to keep the housing market running on all cylinders, but throw in ultra-low mortgage rates and you have a recipe for sustained momentum as we move further into 2020 and approach the all-important spring homebuying season. But don’t be complacent. There is a sense of urgency to capture these rates while they remain at historically low levels because rates can move up fast. In its recent report, Realtor.com says this spring homebuying season may be the last to see gains to affordability in quite a while.
“The low mortgage rate environment continues to spur homebuying activity, with applications to purchase a home up 15% from a year ago,” said Sam Khater, Freddie Mac’s chief economist in its latest mortgage rate survey. “We’ve seen new residential construction surge over the last few months, on pace to reach the highest level in more than a decade. This is a good sign for the inventory-starved housing market and is a promising indication for the spring homebuying season.”
If you or anyone you know has questions about home loan rates or products, please reach out. I’m always happy to help.
We are ready to help you find the best possible mortgage solution for your situation. Contact Sheila Siegel at Synergy Financial Group today.
