Next year will be a challenging one for buyers, according to an industry forecast – not because of what they can afford, but because of what they can find
Housing inventory will likely hit historic lows next year, driving a continued slowdown in the housing market, according to a forecast released today by Realtor.com.
Despite some relief from new construction, moderating home prices and low interest rates, affordability will continue to be a struggle for first-time buyers and sellers will contend with slowing activity and flattening price growth, Realtor.com predicted. These trends are projected to drive existing-home sales down 1.8% to 5.23 million.
Highlights of the 2020 forecast include:
- Home prices will increase just 0.8% nationwide, and will decline in more than 25 of the 100 largest metros, including Chicago, Dallas, Las Vegas, Miami and San Francisco
- Inventor shortages could reach historic lows, especially in the entry-level category
- Millennials will surpass 50% of all home-purchase mortgages
- Baby boomers will have little incentive to sell and will continue to hold onto their homes, while Generation X is more likely to upsize, freeing up some entry-level inventory
“Housing remains a solid foundation for the US economy going into 2020,” said George Ratiu, senior economist at Realtor.com. “Although economic output is expected to soften – influenced by clouds of uncertainty in the global outlook, business investment and trade – real estate fundamentals remain entangled in a lattice of continuing demand, tight supply and disciplined financial underwriting. Accordingly, 2020 will prove to be the most challenging year for buyers – not because of what they can afford, but rather what they can find.”
