During the “Residential Economic Issues & Trends Forum” at National Association of Realtors 2024 Realtors Legislative Meetings, NAR Chief Economist Lawrence Yun forecasted that interest rates will fall in the long term, 2024 existing-home sales will rise to 4.46 million (up 9% from 4.09 million in 2023) and 2025 existing-home sales will increase to 5.05 million (up 13.2% from 2024) – with further gains in eight of the next 10 years. Other key points from his discussion:
- Based on April’s employment data, there are 6 million more jobs compared to pre-COVID highs, and jobs are boosting home prices. “More jobs mean more home sales and higher housing demand,” Yun said. “You need a strong local economy for a strong housing market.”
- Rents will calm down further, which will hold down the consumer price index (CPI) and make the Federal Reserve cut interest rates.
- The U.S. currently has 40 million more total payroll jobs and 70 million more people than in 1995. However, annual existing-home sales in 2023 experienced their worst year since 1995. So far in 2024, monthly existing-home sales rates have struggled to climb above last year’s level. “How is it that home sales can be this low when we’ve got so many people living in this country?” asked Yun. “High mortgage rates and lack of inventory were a shock. Over the next 10 years, probably eight of those 10 years will improve for home sales.”
- Regarding housing inventory: “Not all housing demand is being satisfied, due to lack of supply. We are looking at advocacy policies to counteract that.”
The full report on his discussion can be found here.
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