A group of top economists arrived at a consensus 2020 economic and real estate forecast at the National Association of Realtors’ first-ever Real Estate Forecast Summit.
The economists who gathered at NAR’s Washington, D.C. headquarters expect the U.S. economy to continue expanding next year while projecting real estate prices will rise and reiterating that a recession remains unlikely.
These economists predicted a 29 percent probability of a recession in 2020 with forecasted Gross Domestic Product growth of two percent in 2020 and 1.9 percent in 2021.
The group expects an annual unemployment rate of 3.7 percent next year with a small rise to 3.9 percent in 2021. When asked if the Federal Open Market Committee will change the federal funds rate in 2020, 69 percent of the economists said they expect no change, while 31 percent expect the committee will lower the rate next year.
The average annual 30-year fixed mortgage rates of 3.8 percent and four percent are expected for 2020 and 2021, respectively. Annual median home prices are forecasted to increase by 3.6 percent in 2020 and by 3.5 percent in 2021.
“Real estate is on firm ground with little chance of price declines,” said NAR’s chief economist Lawrence Yun.
“However, in order for the market to be healthier, more supply is needed to assure home prices as well as rents do not consistently outgrow income gains.”
Apartment rents are expected to rise 3.8 percent and 3.6 percent, respectively, in 2020 and 2021.