Relentless supply constraints and home price growth outpacing wages are testing the patience of homebuyers this year, but existing-home sales are still on track to come in at their highest pace since 2006, according to a Realtor economic forecast by Lawrence Yun, economist of the National Association of Realtors.
According to Yun, monthly existinghome sales came in at an annual rate slightly higher (5.29 million) than last year’s overall annual pace (5.26 million). Demand has mostly remained strong – especially in the top job-producing metro areas – and is being upheld by mortgage rates near three-year lows and the 14 million jobs gained since 2010.
“The housing market continues to expand at a moderate pace in spite of the fact that home prices are rising too fast in some areas because of insufficient supply fueled by the grossly inadequate number of new single-family homes being constructed,” said Yun. “The good news is that pending sales in recent months have remained stable and should support a modest gain in home sales heading into the summer.”
Yun forecasts existing sales to finish 2016 at a pace of around 5.40 million – the best year since 2006 (6.48 million). After accelerating to 6.8 percent in 2015, the national median existing-home price is forecast slightly moderate to between 4 and 5 percent this year
Thousands of Realtors® from across the nation are meeting with legislators, regulators and industry leaders this week in Washington DC to advance the issues critical to their businesses, communities and clients.
“There is a wide range of residential and commercial real estate issues that are of high importance to Realtors®, so we’ll be using the strength of our combined voices to remind members of Congress to maintain sound real estate markets,” said National Association of Realtors® President Tom Salomone, broker-owner of Real Estate II Inc. in Coral Springs, Florida. “Furthermore, we’ll be setting the stage for next year, after the elections, when House and Senate leaders on both sides of the aisle are expected to move tax reform proposals.”
Realtors® will be on Capitol Hill and meet directly with members of Congress and their staff to discuss the legislative and regulatory environment and its effect on residential and commercial real estate. Among the high-profile policy issues that Realtors® will raise are extending the Mortgage Forgiveness Debt Relief Act, maintaining important real estate tax policies and Federal Housing Administration reforms, and ensuring that mortgage guarantee fees are not extended, increased and diverted away for unrelated government spending.
Attendees will also be conducting in-person meetings with officials and staff at the White House and more than a half dozen regulatory agencies, including the Environmental Protection Agency, Federal Housing Finance Agency, Department of Agriculture’s Rural Housing Service, Department of Transportation’s Federal Aviation Administration, and the Department of Veterans Affairs.
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing more than 1.1 million members involved in all aspects of the residential and commercial real estate industries.
Bolstered by big gains in the Northeast and Midwest, existing-home sales bounced back in March and remained slightly up from a year ago, according to the National Association of Realtors®.
Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, jumped 5.1 percent to a seasonally adjusted annual rate of 5.33 million in March from a downwardly revised 5.07 million in February. Sales rose in all four major regions last month and are up modestly (1.5 percent) from March 2015.
Lawrence Yun, NAR chief economist, says home sales had a nice rebound in March following February’s uncharacteristically large decline. “Closings came back in force last month as a greater number of buyers – mostly in the Northeast and Midwest – overcame depressed inventory levels and steady price growth to close on a home,” he said. “Buyer demand remains sturdy in most areas this spring and the mid-priced market is doing quite well. However, sales are softer both at the very low and very high ends of the market because of supply limitations and affordability pressures.”
The median existing-home price2 for all housing types in March was $222,700, up 5.7 percent from March 2015 ($210,700). March’s price increase marks the 49th consecutive month of year-over-year gains.