SANTA CLARA, Calif.— At a time when millennials are reaching key life milestones, the U.S. housing market will continue to slow in 2020 as inventory reaches historic lows and economic uncertainty prompts consumers to pull back on their spending, according to the realtor.com® 2020 housing forecast released today.
The forecast predicts that despite some relief from new construction, moderating home prices and relatively low interest rates, first-time buyers will continue to struggle with affordability. Sellers will contend with flattening price growth and slowing activity. These trends will drive existing home sales down 1.8 percent to 5.23 million.
Highlights of the realtor.com® 2020 forecast include:
“Housing remains a solid foundation for the U.S. economy going into 2020,” said George Ratiu, senior economist at realtor.com®. “Although economic output is expected to soften – influenced by clouds of uncertainty in the global outlook, business investment and trade – real estate fundamentals remain entangled in a lattice of continuing demand, tight supply and disciplined financial underwriting. Accordingly, 2020 will prove to be the most challenging year for buyers, not because of what they can afford, but rather what they can find.”
What will 2020 be like for buyers?
Buying a home in 2020 will be a mixed bag. It will offer more opportunities for some as the supply of new homes begins to offset inventory pressure that has built over the last four years, interest rates remain reasonable and home prices flatten. The broad price moderation will continue to make mid-sized markets in the Midwest and South attractive. However, the construction of new homes in 2019 was largely isolated to upper-tier of housing and that is unlikely to ease conditions for first-time homebuyers. Additionally, while qualifying for a mortgage could be easier on paper due to stabilizing prices and a still relatively low rate environment, the total number of homes available for sale will hit a record low.
What will 2020 be like for sellers?
Sellers in 2020 will grapple with dormant price growth and slowing activity, which will require a greater level of patience and a thoughtful approach to pricing. Entry-level home sellers can expect steady competition for their homes, which will keep prices firm. Upper-tier housing is expected to be softer as properties will likely sit on the market longer, requiring greater incentives to close deals. As the market moves toward a more balanced scenario, sellers who adjust to local market conditions can expect to benefit from continuing demand.
Forecasted key 2020 housing trends
Realtor.com® 2020 Housing Market Forecast
Mortgage Rates |
Up to 3.88% by year end |
Existing Home Median Price Appreciation |
+0.8% |
Existing Home Sales |
-1.8% |
Single-Family Home Housing Starts |
Up 6% |
Homeownership Rate |
64.6% |
Sale and Price Forecast for 100 Largest Markets
Area |
Sales |
Price |
United States |
-1.8% |
0.8% |
Akron, Ohio |
2.6% |
0.0% |
Albany-Schenectady-Troy, N.Y. |
-0.5% |
2.3% |
Albuquerque, N.M. |
-0.2% |
0.9% |
Allentown-Bethlehem-Easton, Penn.-N.J. |
2.3% |
0.4% |
Atlanta-Sandy Springs-Roswell, Ga. |
-3.5% |
4.5% |
Augusta-Richmond County, Ga.-S.C. |
-4.2% |
2.1% |
Austin-Round Rock, Texas |
-2.8% |
-0.2% |
Bakersfield, Calif. |
-0.3% |
-1.4% |
Baltimore-Columbia- Towson, M.D. |
-0.1% |
-0.3% |
Baton Rouge, La. |
-1.6% |
0.4% |
Birmingham-Hoover, Ala. |
-1.3% |
-1.1% |
Boise City, Idaho |
0.3% |
8.1% |
Boston-Cambridge-Newton, Mass.-N.H. |
-2.1% |
1.2% |
Bridgeport-Stamford- Norwalk, Conn. |
-4.1% |
4.8% |
Buffalo-Cheektowaga- Niagara Falls, N.Y. |
2.6% |
-2.2% |
Cape Coral-Fort Myers, Fla. |
0.0% |
2.6% |
Charleston-North Charleston, S.C. |
1.2% |
1.9% |
Charlotte-Concord- Gastonia, N.C.-S.C. |
0.4% |
0.1% |
Chattanooga, Tenn.-Ga. |
2.0% |
3.6% |
Chicago-Naperville-Elgin, Ill.-Ind.-Wis. |
-0.9% |
-0.3% |
Cincinnati, Ohio-Ky.-Ind. |
1.3% |
0.3% |
Cleveland-Elyria, Ohio |
2.6% |
0.4% |
Colorado Springs, Colo. |
-1.4% |
6.3% |
Columbia, S.C. |
5.5% |
-0.2% |
Columbus, Ohio |
-2.0% |
1.7% |
Dallas-Fort Worth-Arlington, Texas |
-4.9% |
-0.5% |
Dayton, Ohio |
0.6% |
-0.2% |
Deltona-Daytona Beach-Ormond Beach, Fla. |
1.1% |
0.2% |
Denver-Aurora-Lakewood, Colo. |
-2.3% |
1.7% |
Des Moines-West Des Moines, Iowa |
-10.5% |
0.4% |
Detroit-Warren-Dearborn, Mich. |
-4.1% |
-1.0% |
Durham-Chapel Hill, N.C. |
-0.9% |
1.2% |
El Paso, Texas |
0.9% |
0.6% |
Fresno, Calif. |
-0.7% |
-0.9% |
Grand Rapids-Wyoming, Mich. |
-4.2% |
0.2% |
Greensboro-High Point, N.C. |
0.8% |
-2.9% |
Greenville-Anderson- Mauldin, S.C. |
-2.5% |
0.1% |
Harrisburg-Carlisle, Penn. |
0.3% |
0.5% |
Hartford-West Hartford-East Hartford, Conn. |
-3.0% |
2.7% |
Houston-The Woodlands- Sugar Land, Texas |
0.3% |
0.2% |
Indianapolis-Carmel- Anderson, Ind. |
0.0% |
1.1% |
Jackson, Miss. |
-2.1% |
-0.1% |
Jacksonville, Fla. |
-2.3% |
0.7% |
Kansas City, Mo.-Kan. |
3.4% |
-4.0% |
Knoxville, Tenn. |
1.6% |
1.3% |
Lakeland-Winter Haven, Fla. |
-0.9% |
0.2% |
Las Vegas- Henderson-Paradise, Nev. |
-9.5% |
-1.1% |
Little Rock-North Little Rock-Conway, Ark. |
-2.6% |
1.0% |
Los Angeles-Long Beach-Anaheim, Calif. |
-6.0% |
0.7% |
Louisville/Jefferson County, Ky.-Ind. |
-0.8% |
0.9% |
Madison, Wis. |
-1.3% |
1.9% |
McAllen-Edinburg-Mission, Texas |
4.4% |
4.0% |
Memphis, Tenn.-Miss.-Ark. |
0.1% |
3.0% |
Miami-Fort Lauderdale-West Palm Beach, Fla. |
-1.1% |
-1.2% |
Milwaukee-Waukesha-West Allis, Wis. |
-3.6% |
2.1% |
Minneapolis-St. Paul-Bloomington, Minn.-Wis. |
-2.4% |
2.8% |
Nashville-Davidson–Murfreesboro–Franklin, Tenn. |
-1.2% |
0.4% |
New Haven-Milford, Conn. |
5.0% |
-2.4% |
New Orleans-Metairie, La. |
-2.3% |
-0.7% |
New York-Newark-Jersey City, N.Y.-N.J.-Pa. |
-4.1% |
0.7% |
North Port-Sarasota-Bradenton, Fla. |
1.6% |
0.5% |
Oklahoma City, Okla. |
-1.4% |
-0.8% |
Omaha-Council Bluffs, Neb.-Iowa |
-3.0% |
0.7% |
Orlando-Kissimmee-Sanford, Fla. |
0.9% |
1.8% |
Oxnard-Thousand Oaks-Ventura, Calif. |
-6.0% |
0.1% |
Palm Bay-Melbourne-Titusville, Fla. |
-9.8% |
0.2% |
Philadelphia-Camden-Wilmington, Pa.-N.J.-Del.-Md. |
-3.9% |
0.8% |
Phoenix-Mesa-Scottsdale, Ariz. |
-0.4% |
3.4% |
Pittsburgh, Pa. |
-0.6% |
1.3% |
Portland-South Portland, Maine |
1.4% |
1.2% |
Portland-Vancouver-Hillsboro, Ore.-Wash. |
-3.0% |
0.5% |
Providence-Warwick, R.I.-Mass. |
-2.1% |
0.2% |
Raleigh, N.C. |
0.2% |
2.2% |
Richmond, Va. |
-7.7% |
0.6% |
Riverside-San Bernardino-Ontario, Calif. |
-7.6% |
1.5% |
Rochester, N.Y. |
4.7% |
0.4% |
Sacramento-Roseville- Arden-Arcade, Calif. |
-6.1% |
0.8% |
Salt Lake City, Utah |
-0.5% |
3.5% |
San Antonio-New Braunfels, Texas |
-1.9% |
0.8% |
San Diego-Carlsbad, Calif. |
-3.2% |
0.2% |
San Francisco-Oakland- Hayward, Calif. |
-4.5% |
-0.4% |
San Jose-Sunnyvale-Santa Clara, Calif. |
-3.0% |
2.1% |
Scranton-Wilkes-Barre-Hazleton, Penn. |
-2.7% |
-3.2% |
Seattle-Tacoma-Bellevue, Wash. |
-0.8% |
3.1% |
Spokane-Spokane Valley, Wash. |
1.5% |
1.3% |
Springfield, Mass. |
0.3% |
1.1% |
St. Louis, Mo.-Ill. |
-1.2% |
-0.6% |
Stockton-Lodi, Calif. |
0.7% |
-0.5% |
Syracuse, N.Y. |
-1.4% |
0.6% |
Tampa-St. Petersburg- Clearwater, Fla. |
0.6% |
1.6% |
Toledo, Ohio |
0.5% |
-0.1% |
Tucson, Ariz. |
3.4% |
3.3% |
Tulsa, Okla. |
1.0% |
-2.3% |
Urban Honolulu, Hawaii |
3.6% |
-0.9% |
Virginia Beach- Norfolk-Newport News, Va.-N.C. |
-3.8% |
1.1% |
Washington-Arlington- Alexandria, D.C.-Va.-Md.-W.V. |
-1.5% |
2.6% |
Wichita, Kan. |
-0.5% |
1.1% |
Winston-Salem, N.C. |
3.6% |
0.5% |
Worcester, Mass.-Conn. |
-0.4% |
-0.6% |
Youngstown-Warren- Boardman, Ohio-Penn. |
-0.4% |
2.1% |
About realtor.com®
Realtor.com®, The Home of Home Search℠, offers the most MLS-listed for-sale listings among national real estate portals, and access to information, tools and professional expertise that help people move confidently through every step of their home journey. Through its Opcity platform, realtor.com® uses data science and machine learning to connect consumers with a real estate professional based on their specific buying and selling needs. Realtor.com® pioneered the world of digital real estate 20 years ago, and today is a trusted resource for home buyers, sellers and dreamers by making all things home simple, efficient and enjoyable. Realtor.com® is operated by News Corp [Nasdaq: NWS, NWSA] [ASX: NWS, NWSLV] subsidiary Move, Inc. under a perpetual license from the National Association of REALTORS®. For more information, visit realtor.com®.