A healthy job market paired with lower mortgage rates have made homes more affordable for many consumers in the United States.
Consumer Confidence in the Current Economy
With a consistent demand for housing across the country as a whole, consumers are confident in the stability of both the current economy and job market. 2019 saw three interest rate cuts from the Federal Reserve which helped support some of the housing market’s recent strengths as well. Some speculate that the housing market may still have more room to grow as unemployment rates remain low and average wages are beginning to increase.
Scott Clemons, chief investment strategist with Brown Brothers Harriman, expressed that,
Housing is important for consumer psychology since homes make up the bulk of most people's wealth, not stocks. Housing can continue to be a tailwind for the economy.
The average 30-year fixed mortgage rate is hovering around 3.625%, down from 4.51% at the beginning of 2019. In response, new home sales hit the highest level since 2007 beginning in December of 2019. Brad McMillan, chief investment officer at Commonwealth Financial Network noted that, “Housing is a significant indicator of consumer willingness to spend, and this recovery is a positive indicator for 2020”.
In response to swirling rumors of a recession to hit 2020, CNBC, quoting Goldman Sachs economists, stated,
Just months after almost everyone on Wall Street worried that a recession was just around the corner, Goldman Sachs said a downturn is unlikely over the next several years. In fact, the firm’s economists stopped just short of saying that the U.S. economy is recession-proof.
The optimism regarding the economy echoes similar sentiments about the housing market. Steady, sustained growth fueled by a healthy labor market makes 2020 a great time to buy or sell a home.
Economic Victory in New Jersey
The consistent demand for housing in New Jersey gives way to the value of homes rising by 3.2% in 2019 alone with projections to rise another 1% over the course of 2020. With the economy in New Jersey experiencing its own personal victories with the addition of close to 7,000 jobs in 2019, the strength that comes with success is directly benefiting the housing market.
The combination of a healthy economy, strong job market, and booming demand for new homes indicates success in the housing market this year.