According to Forbes, today’s mortgage rates — at about 3.75 percent — will stay low in 2020. At the same time, market watchers expect home prices to continue to escalate due to low inventory and high demand. Without more listings on the market, competition will increase early in the year. Entry-level home prices will rise higher than incomes. Low-interest rates and the lack of starter homes will continue to raise prices and housing inventory will remain soft through most of the year. As one real estate agent remarked, “You can’t buy what’s not for sale.”

With all that in mind, it might be worth noting that if you are in the market as a buyer or a seller, understanding not only the traditional financing rates from banks, but also look at how alternate methods are also available, especially if you have a lot of equity in your home.

How?  Seller financing!  Of course, this can mean a lot of different things to different people, but we’re seeing more and more of this type of sale in a lot of different markets. 

Obviously, this can be an incentive for sellers given the chance to lower taxes and have another stream of income each month, but surprisingly, many buyers are open to this due to lower up front costs even with (usually) higher interest.  Recently we’ve seen all manner of terms, ranging from the prime rate up to nearly 10% and repayment times from 3 years to twenty.   

            As for homeowners, should they sell in 2020? According to the Federal Reserve, household equity in real estate has more than doubled since its shortage in 2012.  As a result, if you have the flexibility to play the market a bit and use creative financing when you do so, 2020 could be a great year for your new home. 

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