{"id":6269,"date":"2024-05-08T14:51:50","date_gmt":"2024-05-08T14:51:50","guid":{"rendered":"https:\/\/realestateagentmagazine.com\/?p=6269"},"modified":"2024-05-08T14:51:50","modified_gmt":"2024-05-08T14:51:50","slug":"nar-chief-economist-lawrence-yun-predicts-falling-long-term-interest-rates-rising-existing-home-sales-in-2024","status":"publish","type":"post","link":"https:\/\/realestateagentmagazine.com\/nar-chief-economist-lawrence-yun-predicts-falling-long-term-interest-rates-rising-existing-home-sales-in-2024","title":{"rendered":"NAR Chief Economist Lawrence Yun Predicts Falling Long-Term Interest Rates, Rising Existing-Home Sales in 2024"},"content":{"rendered":"

WASHINGTO, D.C.\u2014National Association of Realtors\u00ae<\/sup>\u00a0Chief 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) \u2013 with further gains in eight of the next 10 years \u2013 during the \u201cResidential Economic Issues & Trends Forum\u201d at NAR\u2019s 2024\u00a0REALTORS\u00ae<\/sup>\u00a0Legislative Meetings.<\/p>\n

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.<\/p>\n

Yun said that based on April\u2019s employment data, there are six million more jobs compared to the pre-Covid highs, and jobs are boosting home prices.<\/p>\n

\u201cMore jobs mean more home sales and higher housing demand,\u201d said Yun. \u201cYou need a strong local economy for a strong housing market.\u201d<\/p>\n

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.<\/p>\n

\u201cThe referral business is key,\u201d Yun told a crowd of Realtors\u00ae<\/sup>. \u201cYour 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\u2019t think so.\u201d<\/p>\n

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\u2019s level.<\/p>\n

\u201cHow is it that home sales can be this low when we\u2019ve got so many people living in this country?\u201d asked Yun. \u201cHigh 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.\u201d<\/p>\n

Yun touched on housing inventory saying, \u201cNot all housing demand is being satisfied, due to lack of supply. We are looking at advocacy policies to counteract that.\u201d<\/p>\n

\u201cMortgage rates are very important,\u201d explained Yun. \u201cThe 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\u2019re calling for a September rate cut, but we\u2019ll see.\u201d<\/p>\n

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 \u2013 with a 10% down payment and 80% of median home price \u2013 has gone up significantly during Covid, doubling the cost.<\/p>\n

Yun noted that homeowners are happy. According to NAR data (2023\u00a0<\/em>Profile of Home Buyers and Sellers<\/em><\/a>), 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 \u2013 they would use their agent again or recommend their agent to others.<\/p>\n

Yun questioned whether the immense size of the government deficit is further pressuring rising rates. He addressed government spending: \u201cFour years out from the start of the pandemic, the U.S. is spending money as if we\u2019re still in the heights of Covid-19.\u201d<\/p>\n

\u201cWe had a massive budget deficit while experiencing a good economy, meaning low unemployment,\u201d said Yun. \u201cPeople may get used to permanently high inflation, and people will be looking for an inflation hedge. Real estate is proven.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

WASHINGTO, D.C.\u2014National Association of Realtors\u00ae\u00a0Chief 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) \u2013 with further gains in eight of the next […]<\/p>\n","protected":false},"author":45,"featured_media":6270,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[],"class_list":["post-6269","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-real-estate-news"],"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/realestateagentmagazine.com\/wp-json\/wp\/v2\/posts\/6269","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/realestateagentmagazine.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/realestateagentmagazine.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/realestateagentmagazine.com\/wp-json\/wp\/v2\/users\/45"}],"replies":[{"embeddable":true,"href":"https:\/\/realestateagentmagazine.com\/wp-json\/wp\/v2\/comments?post=6269"}],"version-history":[{"count":1,"href":"https:\/\/realestateagentmagazine.com\/wp-json\/wp\/v2\/posts\/6269\/revisions"}],"predecessor-version":[{"id":6271,"href":"https:\/\/realestateagentmagazine.com\/wp-json\/wp\/v2\/posts\/6269\/revisions\/6271"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/realestateagentmagazine.com\/wp-json\/wp\/v2\/media\/6270"}],"wp:attachment":[{"href":"https:\/\/realestateagentmagazine.com\/wp-json\/wp\/v2\/media?parent=6269"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/realestateagentmagazine.com\/wp-json\/wp\/v2\/categories?post=6269"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/realestateagentmagazine.com\/wp-json\/wp\/v2\/tags?post=6269"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}