By Richard Eimers, May 14, 2024

Lawrence Yun, the Chief Economist for the National Association of Realtors (NAR), has provided a detailed forecast for the U.S. housing market over the next few years. According to Yun, the housing market is poised for a recovery starting in 2024, with an expected rise in existing-home sales by 13.5% compared to the prior year. This marks a significant turnaround from previous declines, with sales projected to hit 4.71 million units in 2024. This increase is anticipated due to a combination of factors including a moderation in mortgage rates, which are expected to average between 6-7% by spring 2024, and an increase in housing inventory which is expected to rise by around 30% as more sellers enter the market.

Yun also highlighted specific regional trends, noting that metro markets in southern states are likely to outperform due to robust job growth, while the Midwest could see gains from its position as the most affordable region. Moreover, Yun expects the economic backdrop to support this recovery, forecasting a 1.5% growth in U.S. GDP and a continuation of low foreclosure rates, which should remain under 1% of all mortgages.

Additionally, Yun predicts that the U.S. housing market will not experience a major decline in home prices; instead, prices might see slight increases, particularly if mortgage rates stabilize around 7%. This projection is set against a backdrop of a gradually improving economic scenario where the Fed is expected to cut rates multiple times to support growth and temper inflationary pressures.

For those looking at the longer-term implications, Yun's insights suggest a gradually stabilizing housing market, with conditions improving for both buyers and sellers as the market adjusts to economic shifts and policy changes.