The Housing Market is Expected to Struggle in 2020
December 9, 2019
If Realtor.com’s forecast is accurate, next year will be a rough one for the housing market. The housing website is predicting that home sales will drop, home prices will flatten, and the housing shortage may be the worst in history.
The website’s economists are forecasting that sales of existing homes will fall 1.8 percent from 2019. Home prices nationally are expected to increase just 0.8 percent, while some of the largest metropolitan areas will see prices fall.
Underlying all of this is the lack of inventory. Housing inventories have been low in recent years, and the issue is expected to be even worse next year. More millennials are belatedly entering the homebuying market, stretching existing inventories even thinner, particularly at the lower end of the market.
One bright note is that this means homebuilders are poised to do well. Construction of single-family homes is expected to increase 6 percent in the coming year, and builders will do everything they can to keep up with demand.