The new year is shaping up to be a good one for homebuyers—at least those interested in buying new homes. Not only are homebuilders more confident in the market than they have been in 20-plus years, but recent construction numbers are surpassing expectations. In fact, according to the U.S. Census Bureau, housing starts hit a 13-year high in December. It’s the seventh consecutive month housing starts have grown. The developments, along with strong economic growth, spurred Fannie Mae to revise its housing forecast for 2020.
The company now predicts housing starts to jump 10% across 2020, with 1 million new homes hitting the market by 2021. As Doug Duncan, chief economist and senior vice president at Fannie Mae explains, “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.” In total, Fannie Mae predicts new home sales to grow 5% in 2020, with much of the growth on the tail-end of the year, and 5.5% in 2021. Existing home sales will also increase, its experts say, but at a slower pace (1.5% in 2020 and 0.2% in 2021).