At the Residential Economic Issues and Trends Forum at NAR NXT in Anaheim, California, NAR Chief Economist Lawrence Yun shared insights and predictions for the real estate market.
Yun forecasts a moderate uptick in 2024 after significant national sales declines of 17% in 2022 and a predicted decline of 18% in 2023. Should the spread between 10-year Treasury bonds and 30-year mortgage rates normalize, Yun anticipates a potential decrease in mortgage rates to below 7% by the spring homebuying season.
Yun projects a 13% increase in existing-home sales and a 19% rise in new-home sales for the upcoming period.
In a departure from its steady rate increases since 2021, the Federal Reserve opted to maintain the federal funds rate at its November meeting. Despite challenges faced by real estate professionals in recent years, Yun pointed out the optimism among homeowners due to ongoing upward pressure on home prices resulting from a lack of inventory.
He referenced a Federal Reserve survey indicating a 34% increase in the median net worth of homeowners since 2019, reaching $396,200, compared to a 30% increase to $10,400 for renters.
"There will be years when home prices don't grow or decline," Yun said. "But as a long-term homeowner, it is almost assured you will come out ahead in America."1