Homes will continue to shrink. The sprawling, suburban homes that Baby Boomers coveted will increasingly become a relic of the past in 2020 and into the next decade as the median square footage of newly built, single-family homes will fall for the fourth time in five years.
The U.S. will not enter a recession in 2020. As recently as July, half of experts surveyed by Zillow predicted a recession would begin in 2020. However, the U.S. economy has remained resilient to expected headwinds like ongoing trade volatility and the possibility of a stock-market retreat.
Home value and rent growth will be slower and steadier. Home value growth is expected to grow 2.8 percent from December 2019 to December 2020, according to a survey of more than 100 housing experts and economists. That’s down from 4.7-percent annual growth in October, the latest month for which data are available.
Mortgage rates will stay low, keeping housing demand high. Mortgage rates fell markedly in 2019 and are expected to remain low for the bulk of 2020. That will keep demand strong and continue to fuel decent price growth in the nation’s most broadly affordable markets.
Sales will climb again after a downturn in 2018. For-sale inventory is near historic lows, but that doesn’t mean a dearth of sales. In fact, the low inventory is largely a result of high demand from buyers who snatch up homes as soon as they hit the market. There are more and more potential buyers, as the large Millennial generation is reaching peak home-buying age in greater numbers each year, and they are benefiting from low mortgage rates, an increase in construction permits and technology that is reducing friction in the market.
Color will make a comeback. Fun will return to home design in the form of bold prints, lively wallpaper and brightly hued walls. After a decade of Scandinavian modern design that dominated retail and social-media feeds as Americans embraced neutrals, minimalism and clutter-free living, expect a shift toward playful, creative design.