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2020 Housing Market is Outperforming 2019's

How the Housing Market Works - Foundation for Economic Education



The pandemic has caused the Federal Reserve to keep interest rates low with the intent of stimulating America's damaged economy. The 30-year fixed-rate mortgages have stuck around 3%. This has a reverberating affect across the world, from the biggest hedge fund managers to your average sellers who are now benefitting from bidding wars  due to lack of inventory.

According to experts, the housing market is recovering aggressively. The National Association of Realtors declared that 2020's housing market was certainly outperforming 2019's, expressing that home sales would end up being higher than last year's (5.34M units).

With buyers entering a market of short supply, the housing market is witnessing an increase in average home prices. Since the buying season got pushed from spring to this fall, agents also believe that winter will be a strong sell time. If this proves true, we're going to segue into a wild 2021 spring season.

Real estate experts and first-year econ students alike are noticing the combination of high demand and low inventory is driving prices upwards. It means the market's usual behavior is not showing at the moment, and is actually doing the opposite. Home sales usually fall in the fall, but, this year, they rise. Twas' decreed by the almighty fed; long live low interest rates!


Source: Altos Research



Only 25% of homes are taking price cuts, instead of over 35%, and demand is the main reason.

Experts predict that several homes will enter the market as the first bimester of mortgage forbearance ends for many homeowners (towards the end of September). It's forecasted that some homeowners will choose to sell their properties, however, most will extend their forbearance period (ending in March), which can imply in new housing inventory.

Check back often for updates on the market, and as always...

Remember to contact us at Castles Unlimited with all of your real estate needs!