The National Association of REALTORS® (NAR) conference was held last week in Boston, Massachusetts, and Lawrence Yun, NAR’s Chief Economist, spoke at the conference. He supervises and is responsible for a wide range of research activity for the association including NAR’s Existing Home Sales statistics, Affordability Index, and Home Buyers and Sellers Profile Report.
Yun’s reports are always widely anticipated and his conference session entitled, Residential Economic Issues and Trends Forum, was packed full of his insight on the US economy and its impact on the housing market.
Below are highlights of Yun’s knowledgable deliberations, as well as various market data from his presentation:
He expects 6 to 8 rounds of cuts to the Fed Funds Rate but cautioned that mortgage rates may not fall. He further expanded his reasoning to say that the massive national budget deficit is affecting the ability of mortgage rates to come down, because with the US Government borrowing so much money, there is less money available to lend for mortgages.
The US dollar should be weakening from the “scary deficit” but it’s not, because people still believe in the power of the United States economy.
In order to get the housing cost under control, we have to increase supply.
We need to get more people back into the labor market to help relieve inflationary pressures and bring rates down.
Cash buyers hit an all-time high at 31% of overall sales nationwide (locally in Worcester County, we were consistently seeing higher cash buyer sales data earlier in 2024).
We have our lowest share of first-time homebuyers, comprising only 24% of buyers.
Astonishingly, one in 10 first time homebuyers are cash buyers. Yun discussed that the cash is coming from: mom and dad, stocks, crypto sales and 7% using inheritance funds.
The median age of a first-time homebuyer is now at 38 years old.
Millennials purchasing homes for the first time are putting further demand pressure on the market and the need for more housing.
The so-called “silver tsunami” is not happening—meaning the aging population selling their homes to create housing inventory. Furthermore, 61 is the average age of a repeat buyer.
For cost savings, multi-generational home buyers hit all time high.
Drop in marriages changing the buyer demographic: single women are a quarter of the first-time homebuyers, more than doubly outpacing single men at 11%, and unmarried couples at 12%.
FSBO’s are at an all-time low at 6% of sales—sellers do not want to leave money on the table and are relying on the use of a seller’s agent.
After an election, regardless of the outcome and more due to the removal of uncertainty, there will be an increase in home sales.
Lauren Bunting is a Broker with Keller Williams Realty of Delmarva in Ocean City, Maryland.
