What to expect from the housing market in 2020 and more…
11 counties will actually see loan limits decrease
According to an announcement from the FHA, the 2020 FHA loan limit for most of the country will be $331,760, an increase of nearly $17,000 over 2019’s loan limit of $314,827.
That loan limit applies to much of the country, with the figure determined as a percentage of the national conforming loan limit for Fannie Mae and Freddie Mac, which is increasing in 2020 to $510,400.
Lenders will fund $2.07 trillion of mortgages in 2019, MBA says
The volume for mortgages to purchase homes probably will total $1.27 trillion, the highest since the peak of the housing bubble in 2006, according to the group’s Nov. 20 forecast.
Refinancing probably will reach $796 billion, the most since 2016, MBA said.
House price growth will continue to decelerate through the next two years. There will be annual increases of 3.2 percent, 2.9 percent and 2.1 percent in 2019, 2020 and 2021, respectively.
Freddie Mac’s Economic and Strategic Research (ESR) continues to predict low interest rates, currently expecting an average for the 30-year mortgage at 3.8 percent in the fourth quarter of 2019 and 4.0 percent for the entire year. It raised its prediction for the average 30-year rate in 2020 from 3.7 percent to 3.8 percent but has extended that predicted rate through 2021.
Low rates continue to feed a surge in refinance mortgage originations, and this too is expected to carry forward, with $846 billion this year and $834 billion in single-family refinance mortgage originations in 2020. As rates are expected to remain steady, there will likely be a fall back in these originations in the second half of 2020 and full year 2021. Modest increases in home sales and house prices will boost purchase mortgage originations for the foreseeable future. Purchase originations should rise steadily to $1,255 billion in 2019, $1,299 billion in 2020, and $1,369 in 2021.
After 40 years of steady declines in domestic migration, mobility has hit a new all-time low
The United States has historically been a country with a high rate of mobility, as cities used their unique job markets to attract new residents, and young couples bought new houses to accommodate children. But this might be changing.
That’s according to new data from the U.S. Census Bureau that show domestic migration has hit a new all-time low in 2019 of 9.8 percent of the population. This follows decades of steady declines. During the 1960s, 20 percent of Americans moved to a new residence each year. In 2019, less than 10 percent of Americans did.
And while the drivers of these declines have evolved and changed through the years, the current drop is being driven by millennials, who are delaying life stages that typically prompt someone to move, such as buying a house, getting married, and having kids.
Conforming loan limit has now increased by nearly $100,000 since 2016
The Federal Housing Finance Agency announced Tuesday that it is raising the conforming loan limits for Fannie Mae and Freddie Mac to more than $510,000.
In most of the U.S., the 2020 maximum conforming loan limit will be raised to $510,400, up from 2019’s level to $484,350.
-Zillow Offers is not the company’s last attempt at transforming the homebuying experience, CEO Richard Barton says.
-“We dream one day of you having an almost trade-in experience with your house,” Barton tells CNBC.
-Zillow is investing in the areas of mortgages and home titles as part of an effort to create “an integrated digital platform,” Barton says.
Baby Boomers make up for a third of the housing market
About a third of homes in the U.S. are owned by those who are 60 and older. In the 2020s and 2030s, Zillow expects this generation will create a “Silver Tsunami,” allowing for more homes on the market as they move out of those homes.
And according to Chase, 76% of Baby Boomers own their own homes.
Between 2007 and 2017, Zillow says nearly 730,000 U.S. homes were released back into the market each year by seniors age 60 or older. From 2017 to 2027, that number is expected to rise to 920,000 and 1.17 million per year, respectively.
Basically, more than 27% of today’s owner-occupied homes will be available by 2037. Housing released by the “Silver Tsunami” is expected to reach as many as 20 million units.
In Freddie Mac’s newest housing market forecast, the company’s economic and housing research group states that they expect mortgage rates to remain around 3.8% for the rest of 2019 and stay at that level for all of 2020 and 2021.
A recent forecast from the Mortgage Bankers Association shows that 2019 is expected to be the best year for refis since 2016, and the best year for purchase mortgages since 2006.
Freddie Mac agrees and expects the good times to keep rolling. In its latest forecast, the government-sponsored enterprise expects there to be $846 billion in refinance originations this year, and $834 billion more in refis next year.
Both of those figures would be more than $300 billion more in refis than there were in 2018.
On the purchase side, Freddie Mac expects there to be $1.255 trillion in purchase originations this year. And the GSE expects those figures to rise in both 2020 and 2021.
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