Home News NAR’s Lawrence Yun Predicts US Home Prices Won’t Experience Major Decline, Could Possibly Rise Slightly in 2023 if Mortgage Rates Remain at 7%

NAR’s Lawrence Yun Predicts US Home Prices Won’t Experience Major Decline, Could Possibly Rise Slightly in 2023 if Mortgage Rates Remain at 7%

by admin
0 comment

ORLANDO (November 11, 2022) – NAR chief economist Lawrence Yun says home inventory will be severely constrained next year against the backdrop of high inflation, rising mortgage rates and slowing sales activity. would prevent a significant decline in housing prices in most parts of the country.

Yoon analyzed the current state of the residential real estate market and announced his outlook for 2023 today. 2022 NAR NXT, The Realtor® ExperienceOrlando, Florida.

“House prices are stable in most parts of the country because there is very little inventory available,” Yoon said. “Prices are going up in some places, but prices are going down in some places, especially California.”

However, Yun noted that today’s market conditions are fundamentally different from those experienced during the Great Recession.

“Housing inventory is about a quarter of what it was in 2008,” says Yun. “Sale of distressed properties is almost non-existent, only 2%, far from the 30% mark seen during the housing crash. Short sales are almost impossible due to the significant price increases over the past two years. .”

Fueled by the unprecedented speed at which mortgage rates rose from 3% in January to around 7% today in 2022, the downturn in the housing market has had a very significant impact on the country’s overall economic performance. , Yun explained.

“Due to the decline in sales and housing construction, [brought] “If the housing market is stable and not declining, GDP will be positive,” Yoon said.

Mr Yun added that there were signs that mortgage rates would plateau, especially as the October consumer price index showed a lower-than-expected rise in inflation. However, he has expressed his concerns about the spread between mortgage rates and federal funds rates.

“The gap between the 30-year fixed mortgage rate and the government’s borrowing rate is much larger historically,” Yoon said. “Without this huge gap, mortgage rates would be 5.8% instead of 7%. With normal spreads, the economy would rebound. Once inflation subsides, financial market fears would ease. and if interest rates fall, owners will be able to refinance.”

Yoon expects home sales to fall 7% in 2023, but median home prices nationwide are up 1%, with some markets seeing prices rise and others falling. I predict it will.

He also projects a strong rebound in housing in 2024, with home sales up 10% and national median home prices rising 5%.

The National Association of Realtors® is America’s largest trade association, representing more than 1.5 million members involved in all aspects of the residential and commercial real estate industry.

# # #

You may also like