2020 Mortgage Forecast
/It’s the dawn of the new year and many of us are wondering what the real estate and mortgage industries will look like in 2020. I will do a meaty real estate update in a couple weeks. Until then, Dan Hubrich of Castle & Cooke Mortgage will let us know what is expected of interest rates for home purchases.
This month I’d like to talk about the economy in general and where we see things going in 2020. Economists are calling our current economy a goldilocks economy. Stocks are at record highs right now and when that happens, mortgage rates usually suffer. One market usually offsets the other. However that is not the case right now. Mortgage rates are also near record lows. This has provided an ideal climate for home buying and refinancing.
How long will this last though? It’s anybody’s guess but one thing is for sure...the biggest piece of news that has moved the markets this past year has been trade talks with China. As that gets resolved, inflation will be the next concern for the general economy. Many people are predicting that we’ll have a gentle recession for 1-2 years when things cool off with the trade war.
If that happens, what will rates do? Well, historically they actually get better when we’re in a recession. So this is more good news for home buyers. The Fed knows that housing drives the economy. When you buy a house, what’s the next thing you buy? EVERYTHING else!! Furniture, carpet, paint, landscaping, lawn mowers, etc. etc. For this reason, the Fed will almost always try to keep rates low when recessions hit so it will help keep the economy chugging along.
We don’t have a crystal ball but all indications are that it’s going to be another great year for people to buy homes and to get the best bang for your buck! Call me with any specific questions and I’d be happy to discuss them with you. Thanks!
Contact Dan or myself for more info!