#1. Home Prices Continue to Rise
In the last two years, housing prices have continued to rise slowly. Last year was slightly less strong than in 2018, as growing home values rose at 3.3% compared to 2018’s 5%, and real estate gurus predict that home prices will only rise by 2.8% in 2020. But still, they continue to increase year after year.
If you’re selling your home, a nice profit may be on the horizon, but keep in mind that a lot of buyers are being priced out of the market so you may have more trouble selling your home. To get more offers, just be aware of the competition. Prepare your home so it stands out from similar ones listed in your area, but don’t take the first offer you get. Be patient, wait for the right offer, and don’t forget to hold your own on the negotiating table!
If in the market to buy, set a budget and stick to it. Figure out what you can afford and don’t let this expensive market dazzle you into something you can’t. If you can’t put down at least 10% on a 15-year fixed-rate conventional loan, this really isn’t a good time to buy. Putting less than 10% down will lead to massive monthly mortgage payments that will ruin your chances of putting any nice things in that house, and forget vacations. But if you want to sleep on a cardboard box in the middle of your dining room and subsist on water and Ramen for the next few years, hey, have at it. You do you.
#2. Mortgage Interest Rates Are on the Decline (for Now)
Mortgage interest rates were steadily dropping below 4% for common types of loans during 2019, and this year economists think interest rates will stay around 3.7% for a 30-year mortgage and 3.2% for a 15-year mortgage. But things like tariffs and trade wars might gradually shift the economy, which could result in the Federal Reserve slowly increasing interest rates to balance things out.
If you’re selling your home, these low interest rates will be motivating buyers to purchase sooner rather than later. But if interest rates do begin to increase for whatever reason, you may have a little more difficulty selling your home. Therefore, if you’re considering it, now is the time to put your house on the market.
#3. Millennials Are Still the Biggest Buyers
Although millennials have been slow to the home buying game, for the past 5 years in a row they have represented the largest cohort of the home buying market with over a third of homebuyers being part of the millennial generation. If you’re selling your home, make sure you have an outstanding online presence. Almost all millennials use the internet for their home search so you need to invest in high quality listing photos and may want to consider taking video footage for a virtual tour as well. If you need any more help on what to know this year, it never hurts to ask!