According to NAR’s Chief Economist Lawrence Yun, the good news is that the housing recession has officially ended—even though the recovery is just getting started.

What’s Changing?

• In June, pending home sales went up by 0.3%, marking the first gain after four months of decline
• Homes are flying off the market—76% of existing homes sold in June were on the market for less than a month
• But supply is still tight: Housing inventory dropped 13.6% compared to last year

Why It Matters

When homes sell quickly and bids are competitive, it means demand is high while supply is low. Homebuilders are responding by ramping up construction and hiring more workers

What Buyers Need to Know

• Higher prices and mortgage rates continue to be barriers—but things may improve soon
• Inflation is cooling and getting closer to the Fed’s target, which suggests that mortgage rates may have peaked
• If rates dip, we could see a surge of new buyers entering the market soon

NAR’s Forecast: What’s Ahead

NAR’s outlook through 2023 and into 2024 includes:

TL;DR (In Plain Language)

• The housing slump is behind us—but it’s not a full boom yet.
• Demand is strong, inventory is low, and homes are selling fast.
• Rates might be at their peak, which could boost buyer activity.
• NAR predicts a decline in existing-home sales this year with a strong rebound next year.
• New construction looks promising too, with prices stabilizing before climbing again.

Source: REALTOR® Magazine
“NAR Economist: ‘Housing Recession Is Over’”
National Association of REALTORS®
Reprinted with permission

In today’s housing market, new and existing home inventories are heading in opposite directions—and that’s a big deal for buyers and sellers alike.

What’s Going On?

• Builders are busy—and it shows.
  Newly built homes still make up only about 10% of U.S. home sales, but thanks to increased construction, new-home inventory is finally growing—especially compared to the sluggish pre-pandemic years.
• Existing homes are scarce.
  Listings of previously owned homes are stuck at roughly half the levels seen in 2019, creating fierce competition and multiple‑offer showdowns for mid-priced homes.
• A brighter outlook for future sales.
  After consecutive years of almost 20% declines in existing-home sales, a rebound seems likely—with forecasts suggesting gains of 10–15% next year, and possibly 25–30% if more sellers enter the market.

Why Are Existing Homes Stuck?

Many homeowners are reluctant to sell because they’re locked into rock-bottom mortgage rates—2.5% to 3%—that are rare in today’s market. Letting go of those rates isn’t easy.

Yet, life keeps moving: from marriages and divorces to births, retirements, job changes, and relocations. Those milestones are nudging people toward selling—if mortgage rates improve even slightly.

Builders Have the Edge

Builders, by contrast, can easily increase supply. That flexibility, combined with smarter pricing and incentives, means new-home sales are rising even when overall sales remain soft.

Even Virtual Viewings Can’t Slow Down Buyers

Even though overall sales dipped a bit in August, buyers remain motivated. About 7% of purchases last month were finalized based solely on a virtual tour—virtually unchanged from the year before—a testament to how technology continues to reshape the market.

Quick Summary

Why It Matters

• Buyers: If you’re considering new construction, now may be a golden opportunity—stock and financing options are improving.
• Sellers: Holding onto ultra-low mortgage rates makes sense—but if you’re prompted by life events and see even a slight dip in rates, it could be the perfect moment to make your move.
• Agents & Industry Pros: This divergence underscores the importance of adjusting your strategy—embrace new-build opportunities while helping clients navigate limited resale options.

Source: REALTOR® Magazine
“New, Existing Home Supplies Diverge”
National Association of REALTORS®
Reprinted with permission

Let’s be real: last year was a wild one for real estate. New-home sales were killing it—buoyed by a 33% increase in inventory and builders offering more affordable options. On the flip side, existing-home sales took a dive—the lowest since 2008—because supply was about half of pre-pandemic levels.

Even with mortgage rates up, buyers were still battling for those existing homes—about a third of listings had multiple offers. Which meant plenty of folks left disappointed.

But here’s the bright side: those who did manage to buy were happy. A whopping 75% said they’d definitely use the same agent again, and another 15% said “probably” NAR. That’s why referrals are such a big business driver—because agents are earning their stripes. And hey, for many homeowners, it paid off: the typical homeowner’s median net worth is nearly $400,000.

Since 2000, roughly 127 million existing homes have sold. That means around 114 million buyers were satisfied at closing. Of course, not everyone stays happy—some businesses fade away, others pop up, and that’s part of the game. In 2023 alone, over 100,000 new agent‑entrepreneurs joined NAR… and about the same number moved on.

With more than 200,000 brokerages in the U.S., buyers can choose from full-service, fee-for-service, or even go it alone. Despite that variety, some legal folks are stirring things up, calling cooperative compensation a “cartel.” But there’s no evidence of collusion, and let’s be honest—collusion among that many professionals would be nearly impossible. The real losers in that scenario? Consumers—especially first-time and first-generation buyers.

Speaking of first-timers: their share of the market ticked up to 31% in November, compared to 28% in both October 2023 and November 2022. Over the full year, they accounted for about 32% of sales.

Why This Matters

• Inventory is everything. New-home sales thrived when supply improved—existing-home sales faltered when it didn’t.
• Great agents matter. Buyers stick with agents they trust—hence the strong referral culture.
• The market keeps evolving. Agents come and go, and buyers have more ways to transact than ever.
• Competition isn’t shady. Lawsuits claiming “cartel” behavior miss the complexity of the industry.
• First-time buyers are finding ways in. Even amid challenges, they’re still a significant chunk of the market.

Source: REALTOR® Magazine
“What Buyers Truly Need”
National Association of REALTORS®
Reprinted with permission

Strong Underlying Demand

2023 saw existing-home sales hit their lowest levels in nearly three decades, largely because homeowners were locked into ultra-low mortgage rates, housing inventory was scarce, and interest rates were climbing. Yet, when viewed through a broader lens, the picture changes: 4 million existing-home sales in 2023 equaled the total from 1995, despite the U.S. population being notably smaller back then. This reveals a wellspring of pent-up housing demand that could potentially fuel robust sales over the next eight out of ten years.

Emerging Signs of Recovery

The market may already be turning a corner. In February (year unspecified), existing-home sales surged 9.5% month-over-month—adjusted for seasonality and a leap year—backed by a 10% boost in inventory. Still, the Northeast bucked the trend: sales fell by 10%, though prices rose—likely a result of ongoing supply constraints and pursuing multiple-offer scenarios.

The Settlement’s Role: A Wildcard

A court‑pending settlement—aimed at changing how buyers and sellers approach agent compensation—adds a wildcard element to the outlook. The proposal would retain consumer choice by allowing compensation off‑MLS while encouraging cooperative agreements between listing and buyer brokers. Its full impact remains uncertain, but NAR anticipates that if listing agents effectively communicate the benefits of cooperation (like attracting more buyers), sellers may continue to see value in such arrangements—especially for first-time, underrepresented, or veteran homebuyers

A Glimpse Into the Future

• Market Momentum is Building
  With historical demand and inventory gains combining, the potential is there for a sustained rise in home sales.
• Regional Variability Will Persist
  Gains won’t be uniform—Northern markets like the Northeast might still lag due to supply issues and stronger competition.
• Settlement Could Reshape Agent Engagement
  If embraced, the new commission structure might empower buyers while keeping cooperative brokerage models viable—especially if agents highlight clear value.

Source: REALTOR® Magazine
“What Will the Future Bring?”
National Association of REALTORS®
Reprinted with permission

In the current real estate landscape, while new-home builders recorded strong activity—posting roughly 40% more inventory in 2023 than in 2019—existing-home sellers have sharply curtailed listings. Established neighborhoods witnessed a 40% drop in existing-home inventory over the same period. This supply squeeze has fueled multiple-offer scenarios and propelled prices to unprecedented levels.

Inventory Trends: A Glimmer of Hope for Buyers

Recent data hints at a softening in the market: this spring saw a 15% uptick in listings compared to the same timeframe last year. Nonetheless, elevated mortgage rates are still dampening affordability, thwarting any immediate rebound in sales.

On the economic front, a welcome slowdown in inflation—from a two-year high of 9% down to 3.3% in May—may nudge the Federal Reserve toward a less restrictive monetary policy stance, potentially easing borrowing conditions over time.

Addressing the Role of Institutional Buyers

Some states are weighing policy interventions to safeguard housing for owner-occupants rather than large-scale, Wall-Street–backed investors. Proposed measures include an excise tax or barring interest-expense deductions for institutional buyers—specifically those acquiring 200 or more single-family rentals.

Navigating the Renter vs. Owner Dynamic

Acknowledging that not everyone aspires—or is able—to own a home, Yun emphasizes the long-term risks of a shifting renter-majority society. Such a trend could lead to populist housing policies—like rent control or eviction moratoria—even when renters fall behind on payments. Instead, he recommends more constructive solutions, such as rental assistance programs—drawing a parallel to how food stamps address hunger more effectively than price controls.

He cautions against following the path of countries like Venezuela, where such heavy-handed interventions have exacerbated economic turmoil.

Record-Setting Prices

As of May, the median existing-home price across all housing categories reached $419,300, marking an all-time high and a 5.8% year-over-year increase from $396,500. Price gains were consistent across all four U.S. regions.

Key Takeaways

• Sharp contrast in inventory: New listings up 40%, existing-home listings down 40% since 2019.
• Listings on the rise: A modest 15% increase this spring notes a potential shift—but mortgage rates remain an obstacle.
• Policy tools under discussion: Targeted taxation and disincentives aimed at institutional investors could help rebalance ownership.
• Policy philosophy matters: Aid (like rental subsidies) trumps restrictive mandates (like rent control) for long-term stability.
• Home prices aren’t easing: May’s median price hit a record high with gains nationwide.

Source: REALTOR® Magazine
“On Inventory and Policy”
National Association of REALTORS®
Reprinted with permission

Inventory Is Rising—but Still Below Pre-COVID Levels

Homebuyers are starting to breathe easier as housing supply begins to recover. Listings are up nearly 20% compared to last fall—great news for buyers. Still, overall inventory remains about one-third below the levels seen before the pandemic.

Why the uptick? Life and career changes are prompting more homeowners to list. And as time passes, more inventory naturally comes onto the market.

Lower Rates Bring Renewed Affordability

Thanks to falling long-term bond yields—partly driven by expectations of six to eight Fed rate cuts between September 2024 and well into 2025—mortgage rates have trended downward. The 30-year fixed rate has dropped from the high 7% range in spring to the low 6% range by fall, translating into savings of around $300 per month for the typical borrower.

This trend is unfolding independent of the Fed’s moves; bond markets are pricing in multiple expected rate reductions. No matter who occupies the White House in 2025, Americans could benefit from lower borrowing costs.

Politics May Surprisingly Fuel More Home Listings

A fascinating finding from The Journal of Finance: homeowners are 4% more likely to put their houses up for sale if a neighbor with differing political views moves in. Could the heightened political climate be nudging more listings forward? It’s an intriguing possibility.

First-Time Buyers Making a Comeback

First-time buyers made up just 26% of home purchases in August 2024—tying a low not seen since November 2021. This is a slight dip from 29% in July 2024 and August 2023.

What This Means for First-Time Buyers

• More Listings, More Options: Inventory is finally rebounding—giving first-time buyers more homes to choose from, even though it’s not back to pre-pandemic levels just yet.
• Lower Rates, Better Buying Power: As borrowing costs dip, first-timers stand to gain significantly—especially on monthly affordability.
• Subtle Social Shifts at Play: Believe it or not, political differences between neighbors may be quietly influencing homeowners to list. That could work in favor of buyers waiting on the sidelines.
• A Long-Awaited Opportunity: With affordability improving and more listings emerging, first-time buyers might find now to be the perfect time to step in.

If you’re a first-time buyer—or working with one—this evolving landscape is worth watching closely. More homes, better rates, and shifting social cues are creating a rare combination of opportunity.

Would you like help interpreting local inventory trends, mortgage rate comparisons, or first-time buyer incentives? I’d be happy to assist!

Source: REALTOR® Magazine
“Retreat for First Timers”
National Association of REALTORS®
Reprinted with permission