There’s a lot said about the factors limiting affordable single-family housing. Land and labor scarcity ... building material costs ... aging-in-place demographics ... rising population ... and last year’s refi surge are often cited for helping constrain supply and raise prices.
“The biggest issue on the table is still inventory,” observes Todd Johnson the head of Wells Fargo Midwest sales division. “It’s less than ideal in certain price points and markets, particularly entry- level.”
The good news? Just about everything else.
A happy new year starts with mortgage cost. “Mortgage rates are down overall and Fannie Mae’s maximum loan amount is now up to $510,400. That’s an increase of nearly $100,000 since 2016,” explains Johnson. “It’s significant when the mortgage on a $500,000 home drops 80 basis points from a year ago now.”
Johnson also cites low unemployment, improved credit access, rising income, and rock-steady consumer confidence as major economic influences. Among all the predictive metrics being tossed about, there is one that really catches his eye: pending home sales.
“I believe this is the bright spot for 2020. Three unanticipated Fed rate cuts last year accomplished a lot in a very short time. Now we’re seeing the positive effects in pending home sales. That bodes well for 2020,” Johnson says.
What rate prediction does Johnson have for industry professionals? “If I’m a housing practitioner or consumer, I’d say the rate environment today is the one we’ll have through the Spring,” he advises. The market has found stability with the Fed and the economy, and for mortgage rates that’s good.”
Make 2020 your best year ever! You can count on me to help get your buyers home with home financing options and tools, including a simplified online mortgage application. Let’s connect!