As home prices continue to increase, about 12 million Americans now spend over half of their earnings on purchasing a home. This is just one of the recent housing trends that continue to shape the real estate sector as the new decade begins.  

Indeed, the latest housing trends have been a mixture of both desirable and undesirable developments. With millennials making up the largest percentage of home buyers, real estate prices have continued to skyrocket.

So what does 2020 have in store for the real estate market? 

That’s what we discuss in this article. We hope that by the time you’re done reading, you’ll be able to make informed decisions on any home purchase or sale you may intend to make.   

1. Investment in Real Estate Will Continue to Increase

One of the most prominent real estate trends at the moment is the increased investment in the industry, despite the economic decline of 2018. The industry continues to receive hundreds of billions of dollars in capitalization. 

Domestic institutions have continued to increase their net holdings in real estate. This enhanced domestic activity is the main reason for more investment flow to the industry. Moreover, the presence of new tech in the market that helps property owners boost their management capabilities will continue to spur growth in the sector.  

As numerous markets continue to experience remarkably low vacancy rates, expect investors to continue pouring money into the industry. 

2. There Will Be a Slower Rise in Home Prices

The housing market saw a jump in home prices between 2017 and 2018. Real estate prices have still continued to increase but at a lower price. The percentage of home listings have also increased, albeit marginally. These developments will continue in 2020.


The first reason is the prevailing economic uncertainty in the country. Many home sellers are choosing to hold on to their property until things look rosier. The increasing mortgage rates have also made some investors shy away from the real estate market. 

Interest in new homes, however, is still high. Experts anticipate a considerable increase in the construction of new homes.  

3. Millennials Continue to Dominate the Home Buyers’ Market

In the past few years, millennials have dominated the residential property buyers’ market. This is one of the trends in real estate that’s set to continue for a while. There are many reasons for this.

Firstly, members of this demographic are finding more stable jobs with impressive incomes. Besides, American millennials prefer middle-class and upper-middle-class homes. In 2020, millennials are expected to account for almost half of the new home buyers and top the mortgage pack.

There are many things sellers can do to benefit from this housing trend.  For instance, they can focus on leveraging the internet, given that most millennials research online before making a purchase decision. Sellers can also offer sustainable homes that have lots of usable space.

4. Buyers Need Affordable Homes

For a long time, house rents have consistently beaten house purchases by a huge margin. As residential home prices continue to increase, the demand for rental housing will increase as well.

So what does this mean for home developers? Well, there’s obviously a need to create affordable homes to attract more buyers. 

5. There’s a Shift to Second-Tier Cities

With real estate prices in first-tier cities out of reach for many investors and home buyers, more people are setting up shop in more affordable second-tier cities. It’s one of the housing market trends that have contributed to a significant increase in investments in such cities.  

But as more investors and buyers flood more affordable locations, the price of real estate prices in those regions continues to increase. This capital movement will result in greater value for homes in second-tier cities. Ultimately, the continued investment in real estate in these cities will equalize capitalization rates in both first-tier and second-tier markets.

6. New Technology Will Continue to Be Featured in Housing Trends

Technology has had a tremendous impact on a wide variety of industries. The real estate industry is one of them. 

In 2020 and beyond, the housing market will continue to adopt new technology, including apps, smart home technologies, and online selling platforms. Expect to see an upsurge in the number of high-tech companies that service the real estate sector. Most of these tech companies will focus on simplifying transaction processes.  

AI will play a significant role in the sector, especially when it comes to building design, organization, and management. Machine learning will continue to help in property design, urban planning, and other areas. 

7. Higher Interest Rates on Mortgages

After several years of stagnation, mortgage interest rates have recently started to increase. This trend is expected to continue in 2020. Rising interest rates point to the continued willingness of Americans to borrow and spend.

So what should home sellers expect as interest rates continue to increase? Generally, buyers will usually give lesser offers for homes. Besides, some buyers may decide to postpone their purchases to avoid the additional burden of paying higher rates.

For those looking to buy homes in 2020, higher interest rates should not be a hindrance. Eligible owners can consider VA loans. A major VA Home Loan benefit is that it typically has a lower interest rate compared to other types of loans. 

8. Increased Focus on Amenities to Attract Buyers

Residential property developers and landlords are increasingly capitalizing on amenities to entice buyers and tenants. Besides parking access and the staple gym, builders are offering other unique amenities such as movie theaters, communal gardens, and so on. There’s an influx of smart homes as well, thanks to savvy investors.

Housing Trends Will Continue to Change

While we can’t predict the future of the real estate market with absolute certainty, we do know that buyer preferences are always evolving. Housing trends will always come and go. One thing that’s for sure, however, is that the need for residential property is here to stay.   

Hopefully, the trends presented here will serve as a guide as you invest in or sell a property this year.  

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