National Association of Realtors (NAR) Chief Economist Lawrence Yun is projecting an 11% higher level of new home sales in 2025 and 8% higher level in 2026, with the median home price forecast to be 2% higher in both 2025 and 2026.
“Maybe the worst is coming to an end,” said Yun regarding the mostly sluggish state of home sales. “Directionally, I think there’s going to be roughly a 10% boost of existing-home sales in 2025 and 2026.”
However, Yun warned that the ongoing federal deficit challenge will impact the housing market for the next two years.
“Today, we have a massive budget deficit at a time when we are not in an economic recession,” said Yun. “Clearly, President-Elect Trump will not stop tax cuts – he will extend or expand them. There will be less mortgage money available because the government is borrowing so much money. However, if the Trump administration can lay out a credible plan to reduce the budget deficit, then mortgage rates can move downward.”
Yun added there was another way to address the budget deficit is to bring down the price of housing.
“We have to have more supply,” he said. “Per our advocacy efforts, we’re trying everything we can to boost supply.”
Yun predicted mortgage rates will be “bouncing around 5.5%-6.5%,” though he doubted rates would drop back to the 4% seen in the first Trump administration. Yun expected the Federal Reserve to enact six-to-eight more interest rate cuts in the coming months, with four different rounds during 2025, but he also recommended that the central bank not rush into additional rate cuts.
“My advice to Jerome Powell: Do it in January, rather than December,” he said.
Photo courtesy of NAR
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Can NAR lobby congress to higher the deductions for selling a personal residence from 250-500K to 500 Plus to stimulate more homes on the market because older people are not able to sell because of capital gains.
This deduction has been in place for over twenty years and pricing on personal residences has quadrupled in the past twenty years.
A higher tax threshold would bring more homes on the market.
Yes, get involved with RPAC. Ideas like this start at the local level and make their way up.
NAR Legislative Tax priority has legislation calling for increased capital gains exclusion for single owners of $500,000 (increased from $250,000) and $1,000,000 (increased from $500,000) for married property owners (principal residence). This legislation would include an index for increasing in future years.
Many elected officials in DC are aware of this proposal but given that this was an election year, no new legislation would take place until the next congress.
If existing conventional loans could be assumed borrowers and sellers could both benefit-more second mortgages and wrap mortgages could make u[p for the cash difference between assumed mortgage and sales price
Even if conventional mortgages can be assumed, many lenders have zero desire to take a second position on the note. And those niche lenders who do offer second mortgages, their rates are usually through the roof and rightfully so. Sometimes, you’re better off just paying the higher traditional mortgage rate and hope you can refinance in a year or two.
I would prefer to see mortgages tied to the BUYER – secured by the home / property.
Allow current mortgage to move with the person(s) to the new property a buyer may purchase.
Yes – the buyer may have to come up with more cash (or find a lender willing to take a second position) if the new property price is greater than the existing mortgage balance and what equity they have remaining after the sale of their previous property / home.
Buyer could keep their existing low mortgage rate moving to a home that fits their current life needs (more room or less room – new location…)
Would provide more homes on the market from owners who are willing to / desire to move but do not want to lose the low mortgage rate the currently enjoy.
Excellent idea having the loan travel with the borrower. As the loan was created using the borrower’s creditworthiness, there shouldn’t be much of a problem, provided the security for a different property is enough to satisfy a lender’s requirements. I currently have a 2-1/2% VA loan on a home worth $500k and wouldn’t even consider giving up this loan unless I could take it with me.
I have lost track but the personal residence deductions ($250 single and $500 married couple) used to be a one-time deduction. Is it still limited to one-time?
NAR has lost all Credibility, I don’t believe anything from them anymore. Time to close up shop and get real jobs. If you’re a Realtor and you’re still giving them money, you may want to think twice. Time for them to fold.
Who cares what the NAR says? The NAR needs to be abolished, investigated and probably prosecuted. The NAR is worthless, nefarious and corrupt. I should not be forced to pay the NAR dues as a real estate agent…don’t call me a “realtor.” Lawsuit after lawsuit is coming. Good riddance NAR.
Quite possibly the dumbest response. I mean in the next two years it’ll continue to go down until it goes to where it was before Covid. Especially with rates being higher. what a blank statement.