The housing market continues to gain momentum as the new year unfolds due in part to a strong labor market and low mortgage rates. Potential buyers are driven by steady employment and a rise in wages.
Just recently Freddie Mac said, "Heading into 2020, low mortgage rates and an improving economy will be the major drivers of the housing market with steady increases in home sales, construction, and home prices."
However, low inventories are creating affordability issues around the country. Freddie Mac says, "While the outlook for the housing market is bright (in 2020), worsening housing affordability is no longer a coastal phenomenon and is spreading to many interior markets and it is a threat to the continued recovery in housing and the economy."
There could be some relief on the way. A recent report showed that new home construction increased more than expected while building permits, a sign of future construction, rose to a near 13-year high. In addition, single-family home construction jumped to a 10-month high.
Bottom line: jobs buy houses and with such a strong labor market, the sector should continue to grow in 2020.