National Association of Realtors (NAR) Chief Economist Lawrence Yun faulted the Federal Reserve for last week’s quarter-point rate hike, claiming it was unnecessary and predicted it will be the last hike for the near-future.
Speaking before NAR’s 2023 Realtors Legislative Meetings today, Yun stated that inflation was already calming ahead of the rate hike, and he blamed the Fed’s rate hike regimen for harming the stability of regional banks and the housing market.
“Inflation will not reignite – inflation will come down closer to 3% by the year’s end,” Yun said. “Inflation has calmed down while rents are still accelerating.”
Yun added that apartment construction has reached a 40- to 50-year high, which will contribute to a decrease in rent growth. He noted new home sales are back to pre-pandemic levels, but existing home sales remained historically low due to a lack of housing inventory.
“We have to stop the bleeding before improvement takes place,” he said. “We need to get more inventory, and the long-term solution is more home building.”
Yun noted that recent price declines for home sales will be temporary and may not be in the best interest of housing stakeholders.
“Home price increases are naturally good for homeowners,” stated Yun. “Everyone participates in wealth gains if you’re a homeowner.”