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    2020 Buyer Trends

     

    2020 has kicked off with a bang, and it’s hard to believe we’re already into February! If you’re considering selling your home this year, you need to know which buyer trends to expect in 2020. Read on for the most important trends for the year, and how it could affect your decision as a seller.

    Trend 1: Millennials are (still) on the move

    Millennials (born 1981-1996) now make up the largest generation in the U.S. And as a generation currently made up of 20- and 30-somethings, they’re in prime home-buying age. In fact, 37% of homebuyers in the last year were in the millennial generation, making this group the largest share of buyers.

    By the time we’re halfway through 2020, millennials will account for an estimated 60-70% of all mortgages taken out in the U.S., greater than all other generations combined. That means for 2020, it’s all about millennial homebuyers.

    What this means for sellers:

    • If you’re considering making upgrades to your home before you sell, know what millennials want. The younger buyers we work with are looking for homes with outdoor living spaces and finished basements; they’re also looking for homes that are low-maintenance and comfortable.
    • For this generation (and most of the others), kitchens and bathrooms will always be king – with kitchens leading the charge. Don’t freak out, though: This often doesn’t mean you need to go through an entire remodel. Easy fixes like painting cabinets, replacing hardware and upgrading appliances (and even countertops) can suffice.
    • Almost all millennials search online when looking for a home, and 80% of recent buyers found their home on their phone. Make sure your listing can easily be found on major consumer search websites, and invest in quality photos of your home.

    Want more tips for selling to millennials? Check this out.

    Trend 2: Prices are on the rise

    In 2018, home prices rose by 5%, in 2019 they rose by 3.3%. In 2020, The Economic & Housing Research Group predicts prices will rise another 2.8%.

    What this means for sellers:

    • We’re on the tail-end of the best real estate economy we’ve ever seen. Now, a lot of people might start throwing around the word “recession” – but hear me out: Experts aren’t talking about a real estate recession right now. They are, however, predicting a real estate correction within the next several years, which means we’ll start to see prices level off a little bit—but so far in 2020, we’ve seen a huge demand of buyers due to low housing inventory. Experts are agreeing that 2020 will still be a very strong year for real estate. 
    • Even if we do see a recession, it doesn’t mean the real estate market will be affected—some recessions actually see an increase in housing prices.

    Here’s a helpful article on how recessions affect housing prices in the U.S.

    Trend 3: Mortgage interest rates are declining

    Interest rates for mortgages have been dropping below 4% for some loans in 2019. Some say that for 2020, a 30-year loan should have a rate of 3.7%, and a 15-year loan will be at 3.2%.

    But just like anything in life, this isn’t a guarantee. A number of factors (like trade wars and tariffs) could shift the economy at any point, causing an increase in interest rates as a way to help balance it out. But if mortgage rates do stay on the decline, this could be a motivation for more buyers.

    What this means for sellers:

    • Lower interest rates means buyers will be more motivated to buy sooner vs. later. A mortgage is a huge financial commitment, so if someone has been thinking about buying and sees lower interest rates, this may push them to commit.
    • Nothing in life is certain, so if rates do increase, be prepared for your home to be on the market longer than you expected.

     

    Curious about what your home is worth now? Get in touch, and we’d be happy to provide an analysis of your home … for free. Let’s set something up!

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