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Get Ready for Spring! By Nadia Evangelou, NAR Research
Mortgage rates are starting off in the new decade at very good levels. According to mortgage finance provider Freddie Mac, the 30-year fixed rate mortgage dipped to 3.7 percent in the first two weeks of January, compared to 4.5 percent a year prior. Thus, mortgage rates started off the new year nearly 80 basis points lower than they were at the start of 2019. At the same time, the unemployment rate is below 4.0 percent, with inflation hovering around the Federal Reserve’s 2.0 percent target. In this fairly stable interest-rate environment, homebuyers are expected to benefit in 2020. Economic activity early in the year usually provides useful clues about the future. Let’s take a deeper look at some of the economic factors expected to affect the housing market at the national and local levels.
Employment The labor market continues to be one of the economy’s strongest points. Nationwide, employment grew an average of 1.4 percent per month from January through November 2019, pushing the national unemployment rate down to 3.5 percent in November 2019. Employment grew 1.6 percent per month during the same period in the District of Columbia, while increasing 1.4 percent per month in Montgomery County. However, the unemployment rate in Montgomery County as of November was much lower than the national level, at 2.6 percent; it was 5 percent in the District of Columbia. Employment is expected to increase further in the metro area since Amazon will soon place the company’s second headquarters in Arlington, Virginia. Amazon expects to add 2,500 new jobs in the area annually during the next 10 years. And in regional economics, whenever a new
12 CAPITAL AREA REALTOR ® — Spring 2020
