The housing market faces an uncertain 2020
After being one of the weaker sectors of the U.S. economy in the first half of 2019, the housing sector rebounded, spurred by a trio of U.S. interest rate cuts from the Fed that lowered the cost of mortgages.
Yes, but: There are clouds on the horizon for 2020, as declining home affordability continues to be a concern, especially for first-time home buyers.
- The median existing-home price for all housing types in December was $274,500, up almost 8% from December 2018, as prices rose in every region, NAR reported.
- November’s price increase marked 94 straight months of year-over-year gains.
Flashback: U.S. existing-home sales rose 3.6% from November to an annual rate of 5.54 million in December and jumped nearly 11% from a year ago, according to the National Association of Realtors.
- After a sluggish start to the year, following the government shutdown and rising mortgage rates, total home sales ended the year at 5.34 million, the same pace as in 2018.
- The average interest rate on a 30-year fixed mortgage was 3.65% as of Jan. 16, according to Freddie Mac, down from 4.45% a year ago.
Watch this space: “Price appreciation has rapidly accelerated, and areas that are relatively unaffordable or declining in affordability are starting to experience slower job growth,” Lawrence Yun, NAR’s chief economist, said in a statement.
- “The hope is for price appreciation to slow in line with wage growth, which is about 3%.”