As we enter the middle of January 2020, we are seeing very similar trends taking place in the housing market as last year. It’s important to stay informed to be able to make smart financial decisions.
Mortgage rates continue to trend lower – in fact, they are down significantly from the average rate in January of 2019. Because of this, many borrowers are going to look for opportunities to refinance. If a borrower has an interest rate of over 4%, they should consider talking to a mortgage professional immediately to save more money every month.
Cash-out refinances were big in 2019 because borrowers began to understand how much equity they have in their homes that they can tap into. Many used their cash-out refinances for rehabbing their current homes or investing that money elsewhere. It’s a great option for borrowers who want more liquid cash in their pocket to explore more real estate investing. Because of this and the lower mortgage rates, we believe cash-out refinances will continue to trend in 2020.
The economy will remain strong for the foreseeable future. The unemployment rate continues to hold steady at a 50-year low of 3.5% while 145,000 jobs were added in December. The economy will continue to expand as many economists are positive about our outlook here in the United States. With this good news, this will not stop people from choosing conservatism with their finances. Many still think back to 2008 and they want to be in a better position if we go through another recession.
Lastly, home prices will continue to rise in 2020. Economists see a 5% rise in prices by November of this year. Millennials are running into more affordability issues and they need to be educated on down payment assistance programs to be able to start investing their money in real estate.
Be sure to check back in our blog section every week to see the latest in the housing market.
Courtesy of Mortgage Market Guide
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