Homeowners are doing well despite sluggish sales activity, says NAR’s Lawrence Yun

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Hi Lawrence, how are you?

Lawrence Yun (Chief Economist) 00:02.120

Good morning. Thanks for having me.

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Good morning and thank you for joining us. Let's try and get a feel for how things are going in the real estate market. The last numbers that I saw for November suggested that home sales were up not only month over month but year over year for November. What's happening?

Lawrence Yun (Chief Economist) 00:18.360

Well, finally it appears to show a little turnaround but we have to remember these increases are very small increases after three years of very sluggish activity So home sales at the about 70% level of pre-COVID condition. So still struggling through, but at least the increase

Lawrence Yun (Chief Economist) 00:39.120

may suggest that we are turning the corner. But throughout all this process, let's remember, homeowners are doing very well. They have seen their home prices rise by roughly 50% from pre-COVID days. So homeowners doing well even though sales activity has remained sluggish.

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And why is sales activity sluggish? What are the big biggest pressures on those things. Is it that people can't get mortgages, that they don't have enough to put down payments, is it that people don't want to move and so there's just not a lot of supply?

Lawrence Yun (Chief Economist) 01:11.120

The sales slumped ever since the Federal Reserve aggressively raised interest rate back in 2022. I mean, they had to address inflation, but the hacking of the interest rate uh just meant that mortgage rate uh went from 3%, 4% to 8% rate. Uh and essentially, it killed off the

Lawrence Yun (Chief Economist) 01:29.080

affordability lack of supply also contributing to lack of transactions. But we are what we are seeing now is that mortgage rate have trended down. We are near three-year low in mortgage rates. We are seeing more inventory come onto the market. Home prices much calmer. Wage

Lawrence Yun (Chief Economist) 01:47.880

growth is in fact outpacing home price growth which improves the affordability also on that front. Uh so right now everything is moving in the right direction. So maybe in 2026 Just the day away, that we will begin to see meaningful recovery in home sales.