National Association of REALTORS® Chief Economist Lawrence Yun says a recession is unlikely in the year ahead. “We expect 2020 will be a year of slower growth but not a recession year”. he says.
1. Unemployment Stays Low
The unemployment outlook remains steady at 3.8%. And the Phase 1 trade agreement with China, announced in January, takes pressure off industries
2. Mortgage rates to sustain housing demand
“We don’t foresee the Fed raising the federal funds rates in 2020. A rate cut of at least 25 basis points in early 2020 is the likely scenario,” says Yun.
3. Modest improvement in housing supply
Lack of housing inventory has been the primary constraint on the housing market. The housing supply is expected to improve this year, with housing starts expected to hit 1.42 million, up from 1.27 million last year.
“Ramping up housing construction will continue to be central to improving home affordability and raising the level of home ownership,” says Yun.
Source: NAR outlook data from November 2019; apartment vacancy rate is based on U.S. Census Bureau data. Industrial, office, retail, and hotel vacancy rates are based on quarterly commercial surveys of REALTORS®.