Spring is normally the busiest season for homebuyers and home sellers alike. However, the spring of 2020 has brought an unexpected turn of events with the COVID-19 outbreak paralyzing the market and economic growth. Buyers looking for new homes will have a rough time in 2020 as the housing shortage is touching record lows. At the same time, interest rates are also touching new lows in the spring of 2020 with a growing number of borrowers and mortgage users filing forbearance requests.
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There is a Large Number of Millennial First-time Buyers
Chief economist and senior Vice president at Haus analytics, Ralph McLaughlin, claims that there is a lot of Millennials looking to purchase homes as first-time buyers. McLaughlin further claims that even though the situation in the housing market is not the brightest by far, it certainly isn’t the worst-case scenario when compared to the Great Recession in 2008. As McLaughlin stated, 2008 was an anomaly that shouldn’t happen again.
Housing Predictions: What Will Happen to the Housing Market in 2020?
Haus’ McLaughlin predicts that the housing market should see a slight rise in inventory in the summer of 2020 after steep declines noted in spring. The declines could return in the fall of the same year. The Haus’ Vice president and Chief economist forecasts that the situation will improve and achieve balance and stability in the spring of 2021. The demand for homes should drop in summer with new homes available in the market, which should be followed by another drop in the fall and for most of 2020.
What to Consider When Buying a Home in 2020?
Homebuyers looking to purchase in the spring of 2020 will be faced with a true challenge if they are looking to find a dream home. Shortened inventory in the housing market should cut options of variety in real estate. That is why new homebuyers should approach the matter with caution. The best option, if applicable and possible in individual cases, would be to postpone home purchases for spring 2021. Home prices are at record highs, which might be another reason to postpone buying a house.
