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    This Week In Real Estate – Dec. 29, 2019

    This Week In Real Estate

    Continued Market Growth Forecast For 2020.

    Fannie Mae and Freddie Mac’s 2020 forecast of continued real estate market growth and stability as reported this week in real estate, is a result of a robust labor market and low mortgage rates. Below are a few highlights from the last full week of 2019 that influence our business:

    Fannie Mae Boosts 2020 Housing Forecast ‘Significantly’.

    Fannie Mae’s Economic and Strategic Research Group predicts builders will expand production more than previously expected, due to a strong labor market and robust consumer spending. Low mortgage rates will also help. After increasing just over 1% annually this year, growth in single-family housing starts will accelerate to 10% during 2020 and the top 1 million new homes in 2021, the group predicts. That would mark a post-recession high but is still far below the annual peak of about 1.7 million single-family starts in 2005 and the 1.2 million annual pace experienced in the late ’90s. Single-family housing starts have been improving steadily since May, and building permits, an indicator of future construction, are also trending higher. The shortage of existing homes for sale has pushed more potential buyers to the new-build market. Mortgage applications to purchase a newly built home were up 27% annually in November, according to the Mortgage Bankers Association. Homebuilder sentiment jumped to the highest level in 20 years in December, according to the National Association of Home Builders. “We now expect single-family housing starts and sales of new homes to increase substantially, aided by a large uptick in new construction as builders work to replenish inventories drawn down by the recent surge in new home sales activity,” said Fannie Mae chief economist Doug Duncan. “Housing appears poised to take a leading role in real GDP growth over the forecast horizon for the first time in years, further bolstering our modest-but-solid growth forecasts through 2021,” said Duncan. Full Story…

    Freddie Mac’s December Forecast Hints at Market Stability in 2020.

    As U.S. home sales are projected to climb in 2020, Freddie Mac’s December Forecast indicates the housing market will continue to stand firm moving into the new year. According to the government-sponsored enterprise, home sales are expected to increase from 6 million in 2019 to 6.2 million in 2020 and, as much as 6.3 million in 2021. “A more accommodative monetary policy stance and robust labor market helped the U.S. housing market regain its footing in 2019,” said Sam Khater, Freddie Mac’s chief economist. Improved sentiment, lower financial market volatility, and trade headwinds are setting up a favorable economic environment for continued real estate market growth in 2020.” Full Story…

    November New Home Sales Trend Higher.

    New home sales posted a small gain in November, after downward revisions for prior months. However, the sales pace for newly-built single-family homes is ending the year strong, with solid demand pointing to additional construction gains in 2020. Contracts for new, single-family home sales increased slightly in November by 1.3% to a 719,000 seasonally adjusted annual rate according to estimates from the joint release of HUD and the Census Bureau. Year-to-date, the 2019 estimate of sales through November is 9.8% higher compared to the year-to-date total for 2018. This general rising trend for new home sales, after the housing affordability crunch of 2018, suggests additional construction gains in 2020. Sales are being supported by ongoing low-interest rates and historically low unemployment. Regionally, for the first eleven months of 2019 (and relative to the first eleven months of 2018), new home sales were up 14.5% in the South, 12% in the West, and down 7.6% in the Midwest and 10.4% in the Northeast. Full Story…

     


    Originally compiled & posted by Jason Waugh on the Berkshire Hathaway HomeServices Northwest Real Estate company blog.

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    Mitch Darby

    I am a real estate broker, architect (both licensed in the State of Oregon), and life-long Oregonian. If you are looking to buy or sell, I can help! I have Northwest Knowledge and am proud to be associated with Berkshire Hathaway HomeServices - Real Estate's Forever Brand!

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