Lawrence Yun, chief economist of the National Association of Realtors predicts a new-home sales jump of 11% to 750,000 in 2020. The forecast would be the highest reading since 2007. This will bring a rise to a 13-year high in sales of new homes.

If this is the case, 2020 will definitely avoid a recession. Not only

are new home sales on the rise, but sales of existing homes should rise 3.7% to 5.56 million making it the highest count since 2017.

“I think we will not be facing an economic recession,” Yun said. One reason, he said, is the economic stimulus provided by home-building.

“We need to produce more homes,” he said. “If we produce more homes, that is an economic stimulator and that growth will prevent us from going into a recession.”

The Department of Commerce saw a positive reading for the first time in six quarters when it came to home-building. With the predicted high of new home sales, many fear a rise in home prices. Yun feels this will not be the case, “we’ll see an increase in inventory, but not any oversupply, so home prices should continue to move higher – our hope is in a much tamer fashion.”

Builders are starting to put more energy towards the first-time home-buyer which means they are starting to build smaller houses.

The predicted median new home sales price will be down 4% from 2019 which will probably amount to $313,500. As far as the median home price of existing homes, Yun predicts it will rise 4.3% to $270,400.

As far as the financial aspect such as mortgage rates and bond yields, both are holding steady. The average U.S. rate for a 30-year fixed mortgage should remain at 3.7% for the first of half of the new year, however it will likely rise to 3.8% in the final two quarters. Bond yields are expected at “sub-4” rates which should continue through next year.

“We’re seeing some bond yields rising, but we even with some fluctuation, I think mortgage rates will be slightly under 4% for 2020, and the reasoning for that is the Fed communication saying they would not be raising interest rates in 2020 given that the inflation rate is under control,” stated Yun.

Click Here For the Source of the Information