What does the housing market have in store for 2020? And how does it affect your search for a new home?
First, a look at 2019. It started with shrinking home price gains. Fortunately, it regained momentum in the fall. The housing market saw lower interest rates. Mid-priced and lower-end markets had an inventory shortage while upper-end markets had plenty in supply.
And now for a look at 2020.
Housing Market Trends in 2020
Many experts say one of the biggest housing market trends is the decrease of square footage in newly built single-family homes. Buyers want smaller homes for greater affordability and lower property taxes. A smaller property also means less maintenance.
While the home size drops, they remain larger than the new homes of 30 years ago. Zillow reports that the median size of a home in 1988 was 1,810 square feet. Today, it’s 2,386 sq. ft., down from 2,467 sq. ft. in 2016. The home value will slow down to a sustainable pace to put it in line with inflation and wage growth.
Experts are divided on what they think will happen to mortgage rates in the 2020 housing market. Realtor.com predicts inventory will be limited at the entry-level price segment. As a result, it believes mortgage rates will start climbing. Forbes predicts the rates will stay low and maybe go lower.
But with lower rates come higher demand and tighter inventory. Already, buyers are searching for new homes earlier than the norm. Because of this, it’s expected there will be a shortage of new homes by the time home buying season arrives in the spring.
Homeowners are staying in their homes longer. That means fewer older homes for sale forcing buyers to look for newly built homes. Buyers who want affordable homes look in smaller towns outside of major cities.
What the Housing Market Trends Mean for Buyers
So, if you’re in the market for a new home, start looking now before the rates increase and the supply depletes. If you work in Austin or want to have easy access to Austin, you might want to look in Kyle. It’s a small town just 20 miles from downtown Austin and 15 miles from shoppers’ paradise in San Marcos. New home builders in Kyle’s Crosswinds community have inventory available, but buyers snap them up quickly.
The builders have just completed a handful of homes in December with more on the way. The sizes of the homes are in line with what buyers want as they range from 1,500 sq. ft. to 2,242 sq. ft. Residents will be able to swim, play, and enjoy the trails of Windy Point amenity center. Also, special incentives are available. Contact your Crosswinds sales counselor for details.