As unemployment and interest rates continue to drop, the cost of homes is on the rise! From increased prices to a growing interest in dog parks, the National Association of Realtors\u00ae (NAR) has offered a few projected trends for the 2020 housing market:<\/p>\n
1. Low interest rates<\/strong><\/p>\n Fun fact: according to Dr. Lawrence Yun, chief economist at the NAR, mortgage rates<\/a> have been decreasing thanks to considerations made by the Federal Reserve. That\u2019s right, the Federal Reserve is helping make change simply by talking about policy! The result has been historically low interest rates for mortgages.<\/p>\n While these will continue to stay low for the time being, Yun does predict that mortgage rates will start to rise as inflation picks up.<\/p>\n 2. Higher housing prices<\/strong><\/p>\n When it comes to housing prices, we don\u2019t have to look much further than the basics of supply and demand. Over the last several years, building has slowed and housing tenure (how long an individual remains in a specific house) has increased. The lower supply of houses increases the demand for each individual home.<\/p>\n Between the increasingly competitive market and the growing accessibility of mortgages, Yun projects a \u201cbaseline growth rate of 1.5% for 2020.\u201d<\/p>\n 3. Foreign buyers<\/strong><\/p>\n Although there has been growth in the United States economy when it comes to employment, that isn\u2019t the case everywhere. In fact, according to Gay Cororaton, director of housing and commercial research at NAR, \u201cForeign buyer purchases have declined sharply since 2017.\u201d<\/a><\/p>\n While some of this decrease comes from financial pressure \u2013 the Chinese yuan, for example, has been losing value \u2013 some of the loss of foreign buyers comes from strained international relations between the U.S. and other countries. There might be growth in the housing market, but it isn\u2019t coming from foreign buyers anymore.<\/p>\n 4. Dog parks<\/strong><\/p>\n Okay, so what\u2019s the deal with dog parks? Well, it has to do with birth rates. According to Dr. Jessica Lautz<\/a>, VP of demographics and behavioral insights at NAR, as the birth rates have dropped, it\u2019s lead to a decrease in households with children.<\/p>\n In the past, a neighborhood near a good school might have been key for a young family, but that\u2019s no longer a selling point for childless couples. That doesn\u2019t mean people don\u2019t want the best for their family, it just means instead of a child, there might be a dog instead. As such, there\u2019s an increase in demand for housing areas close to dog parks and similar outdoor spaces.<\/p>\n