Home Sales are increasing by many measures and the National Association of Realtors has recently revealed their prediction for the 2017 year. At the 2017 Realtors Legislative Meetings and Trades Expo, Lawrence Yun, chief economist of the National Association of Realtors presented his 2017 midyear forecast. He was joined by Jonathan Spader, senior research associate at the Joint Center for Housing Studies at Harvard University, and Mark Calabria, chief economist and assistant to Vice President Mike Pence.
As recently reported, the first quarter for existing home sales was the best quarterly existing sales pace since 2007 (5.62 million), and forecast is for the activity to remain consistent and finish around 5.64 million which would be the best since output since 2006 (6.47 million) and 3.5 percent above 2016.
“The housing market has exceeded expectations ever since the election, despite depressed inventory and higher mortgage rates,” said Yun. “The combination of the stock market being at record highs, 16 million new jobs created since 2010, pent-up household formation and rising consumer confidence are giving more households the assurance and ability to purchase a home.”
Supply and affordability are holding the market back. Yun believes that a healthy labor market should be generating more activity but prices continue to increase and moderately priced housing is off the market quickly in the last quarter.
“A strong labor market will drive a strong housing market, but you can’t have a strong housing market without a strong economic foundation,” said Calabria. “The recovery has been uneven with roughly 70 counties making up roughly half of all job growth. The White House’s proposed plans to cut corporate and individual tax cuts will help large and small businesses grow, hire and ultimately contribute to more households buying homes as more money goes into their pockets.”
Yun also addressed economic activity and said economic growth in the first quarter was “a huge disappointment” at 0.7 percent but he anticipates an increase in consumer spending and homebuilding will be factors for the gross domestic product to finish higher.