NAR Chief Economist Lawrence Yun Predicts Falling Long-Term Interest Rates, Rising Existing-Home Sales in 2024
07 Mayo 2024 - 12:42PM
National Association of Realtors® Chief Economist Lawrence Yun
forecasts 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 – during the “Residential Economic Issues &
Trends Forum” at NAR’s 2024 REALTORS® Legislative Meetings. Yun
also explained that rents will calm down further, which will hold
down the consumer price index (CPI) and make the Federal Reserve
cut interest rates. Yun said that based on April’s employment data,
there are six million more jobs compared to the pre-Covid highs,
and jobs are boosting home prices. “More jobs mean more home sales
and higher housing demand,” said Yun. “You need a strong local
economy for a strong housing market.”Yun discussed the wealth
comparison between homeowners and renters. In 2022, the median net
worth of homeowners was $396,200, while the median net worth of
renters was $10,400. “The referral business is key,” Yun told a
crowd of Realtors®. “Your past clients are super happy in terms of
their wealth gains. Seven percent mortgage rates are high compared
to a couple of years ago, but you have to buy a home in order to
build wealth. Have Americans lost the dream of homeownership? I
don’t think so.”Yun made several comparisons to 1995. 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.”Yun touched on housing inventory saying, “Not all
housing demand is being satisfied, due to lack of supply. We are
looking at advocacy policies to counteract that.”“Mortgage rates
are very important,” explained Yun. “The Federal Reserve has
delayed rate cuts. I would have thought that, by now, rates would
be lower and rate cuts would have begun. Whatever rate cut the
Federal Reserve does not do this year will simply get pushed back
to 2025. They’re calling for a September rate cut, but we’ll
see.”Yun discussed how the 30-year mortgage and federal funds rate
are in a high-rate environment. He explained that the monthly
payment for first-time home buyers – with a 10% down payment and
80% of median home price – has gone up significantly during Covid,
doubling the cost.Yun noted that homeowners are happy. According to
NAR data (2023 Profile of Home Buyers and Sellers), nine out of 10
buyers (89%) relied on the services of a real estate agent or
broker. Of those, there is a 90% satisfaction rate – they would use
their agent again or recommend their agent to others.Yun questioned
whether the immense size of the government deficit is further
pressuring rising rates. He addressed government spending: “Four
years out from the start of the pandemic, the U.S. is spending
money as if we’re still in the heights of Covid-19.” “We had a
massive budget deficit while experiencing a good economy, meaning
low unemployment,” said Yun. “People may get used to permanently
high inflation, and people will be looking for an inflation hedge.
Real estate is proven.”
About NARThe National Association of
Realtors® is America’s largest trade association, representing 1.5
million members involved in all aspects of the residential and
commercial real estate industries. The term Realtor® is a
registered collective membership mark that identifies a real estate
professional who is a member of the National Association of
Realtors® and subscribes to its strict Code of Ethics.
# # #Information about NAR is available at
nar.realtor. This and other news releases are posted in
the newsroom at nar.realtor/newsroom.
Lauren Cozzi
National Association of REALTORS®
202/383-1178
media@realtors.org