Mortgage Watch

Demand for homes is on a fast track for 2020

The demand for housing is coming at the market like a freight train, with the law of supply and demand on full display. The ongoing shortage of available homes for sale combined with a surge of homebuyers is forcing home prices up, according to Redfin. And where it stops, nobody knows.

HousingWire’s Julia Falcon reports that homebuyers are not waiting for spring, as usual, to buy, heating up home buying competition early in 2020. “In fact, there were only 1.4 million units available for sale in December, the lowest level in at least 20 years, according to the National Association of Realtors,” she says. She goes on to say that beyond that, December saw the largest year-over-year decline of housing inventory in almost three years, with inventory declining 12%.

Mortgage rates remaining historically low is a factor in all this. They are now at their second-lowest in three years. The double-edged sword in all this is that while low rates are driving some buyers into the market, they also contribute to many others holding onto their homes, happy to have their newly refinanced mortgage. Those with paid-off homes are enjoying the freedom of cash-out refinances at historically low rates, updating their homes and staying put.

“With every new release of data this year, I’m becoming more and more confident that demand will be strong in 2020—just as strong as, if not stronger than, in 2018 and 2017,” said Redfin chief economist Daryl Fairweather. “The big question for the housing market this year is supply. Will homeowners sit on the sidelines, content with their refinanced loans, or will they want to get in on the action too and move up, move down, or cash out entirely?”

There was a time when we thought bidding wars were behind us, but that was short-lived. “A rise in bidding wars and a continuous spike in home prices may soon be the result of a 10-year peak in home buying demand and 20-year low in the number of homes for sale,” says Falcon.

The silver lining in all this is that in some markets there will be some relief for homebuyers hoping for more selection in the form of newly-built homes. Add this all together, and with 11 months left in the year, 2020 may turn out to be the most robust housing market in nearly a decade.

Source: HousingWire | Redfin, | NARTBWS

 

Rates Currently Trending: Neutral

Mortgage rates are trending sideways to slightly higher this morning. Last week the MBS market improved by +25bps. This was enough to move rates very slightly lower last week. We saw a bit of rate volatility last week.

 

 

About the Author

Tim Morissette, also known in the community as Mr. Foothill Ranch, offers over 46 years of real estate experience which has given him an established reputation and unmatched market knowledge. He is joined by his wife, Michele and sons Matt and Jeff, as they continue to offer personal service with an emphasis on achieving his clients’ real estate goals.  This unique combination of traits has led to his proven track record of referral and repeat business. This can be witnessed by the trust of homeowners in Foothill Ranch where he has sold twice as many homes and represented three times more buyers than the next-leading real estate agent for the last 26 years.

As residents of Foothill Ranch since 1994, Tim and Michele are actively involved in the community by fundraising for Foothill Ranch Library, Make-a-Wish Foundation, Cancer Society, Homes for Habitat, Relay for Life, South County Outreach, and the local church and schools. Tim enjoys sponsoring community-wide garage sales, paper shredding and e-waste recycling event, an Easter egg hunt, & a Meet Santa Event.

Tim and Michele are dedicated to their family of four sons, daughter-in-laws, and grandchildren. As a family, they enjoy many outdoor activities which include camping, spearfishing, mountain climbing and exploring the miles of hiking and equestrian trails in Foothill Ranch and the Whiting Ranch Wilderness Park. Tim and his sons are also avid snowboarders and enjoy mountain biking and lobster diving. Family is a top priority in the Morissette household. They look forward to helping more families achieve their dreams of homeownership.