The potential for housing sales in 2020 is very good according to First American Title, which tracks housing sales and inventory each month, to create an index measuring the potential for the housing market in the US. Its latest report says that the market potential for existing-home sales increased by 4.7 percent compared with a year ago, a gain of 240,050 sales. “The growth in market potential for existing-home sales is primarily fueled by positive market demand dynamics. In 2020, 4.8 million millennials will turn 30 – the peak age for homebuying. They’re fortunate to be entering the housing market at a time of historically low interest rates and a strong economy. However, there are challenges,” said Mark Fleming, chief economist at First American. “Millennials face a very limited supply of existing homes available for sale, especially homes in the entry-level price range.” What’s the biggest drag on potential sales? Baby boomers and low interest rates, apparently. “The same dynamic that’s making homes more affordable is preventing more supply from entering the market. Persistently low rates can discourage existing homeowners from selling,” said Fleming. “The aging of the U.S. population has also contributed to rising tenure length as many aging silent generation, baby boomer and Generation X homeowners decide to remain in their existing homes,” he added.
Source: National Mortgage Professional