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
