WASHINGTON, DC — The chief economist for the nation’s leading real-estate trade association said last month that he does not foresee a nationwide decline in home prices, despite indications that price growth is projected to slow in the months ahead.
Testifying before the U.S. Senate Committee on Banking, Housing, and Urban Affairs, Lawrence Yun, chief economist for the Washington, DC-based NAR, said that the potential for weaker existing-home sales should increase available inventory in some markets, but not enough to diminish persistent affordability constraints which, for many Americans, have kept homeownership out of reach in recent years.
“In the near term, I do not expect the situation to change appreciably,” Yun testified. “Historic undersupply in the market combined with continued demand will likely drive ongoing issues with affordability for many Americans.
“Any short-term price adjustments, if they occur, will be less consequential compared to the immense longer-term housing affordability challenges we face as a country,” Yun added.
The Senate hearing came as the U.S. confronts a decades-in-the-making six-million-unit housing shortage that has helped sustain year-over-year price growth for a record 124 consecutive months. COVID’s impact on U.S. housing along with recent, dramatic fluctuations in mortgage interest rates have also impacted the market for new- and existing-home sales, Yun observed.
“Any increases in available inventory observed over the first half of this year have been offset by the corresponding increases in consumer costs,” Yun said on Capitol Hill. “This is why housing supply must be addressed to moderate home price and rent gains.”