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The Most Important 2020 Market Changes to Know
Dated: July 28 2020
Here’s what you should know about the 2020 real estate market so far.
If you’re like the majority of homeowners (and potential homebuyers), you’re probably still trying to get a handle on what’s been happening in this unusual 2020 housing market. We’ve identified the three most important things for buyers and sellers alike to know:
1. Interest rates. In April 2019, we saw interest rates hover around 4.2%, and everyone thought there was no way they would go lower. Well, a year later, we’ve seen interest rates drop to 3.2%. Though they’re starting to climb a little, they’re still historically low.
Pro tip No. 1: Lock in a low rate. Just because you get approved for a mortgage doesn’t automatically mean that you get the best rate. Various factors are at play when determining what rate you’ll get, but the two most important ones are your credit score and debt-to-income ratio. To ensure you get the best rate possible, increase your credit score and decrease your debt.
2. Peak listing season has shifted. Normally, we see a steady increase in listings from January through the peak month of May. Due to COVID, the peak season was pushed back to June through July. We should soon see listings slowly taper off shortly.
Pro tip No. 2: Don’t wait until May to list. In a traditional market, Realtors tend to advise their clients to list in the historically busy month of May, but I recommend you list your home earlier in the year (February or March) to beat the rush of incoming listings. Doing so ensures you’ll have the best home selling options available.
3. The median price has increased. Over the last year, it’s gone from $235,000 to $265,000—a pretty hefty increase. That being said, we don’t know what will happen in the future.
Pro tip No. 3: The best time to buy a house is whenever you can. The housing market will always increase over time. Let’s say you buy a home for $250,000 and your monthly mortgage payment is $1,500. Over five years, you would generate over $50,000 in equity. If you rented that same house for $1,500 per month, you’d end up paying your landlord over $90,000 over that same five-year period—with nothing to show for it.
If you have any real estate-related questions you’d like to discuss, or questions about our ever-changing market, feel free to reach out via phone or email. We’d be more than happy to help with whatever your needs may be.
As a licensed real estate professional in Minnesota and Wisconsin and a nation-wide referral community. I provide much value to facilitating real estate transactions with focus in the luxury and reloc....
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