Housing sales are set to remain strong during the second half of the year, U.S. realtors believe.
Continued economic expansion and an increase in wage growth are set to boost the housing market. The boost should support strong sales in the second half of 2019, according to speakers at the 2019 Realtors® Legislative Meetings & Trade Expo.
Lawrence Yun, Chief Economist at the National Association of Realtors® (NAR), delivered his 2019 midyear forecast, which predicted changing future migration patterns as buyers search for more affordable markets.
Inventory in the U.S. has grown for eight straight months on a year-over-year basis, and Mr Yun expects that to continue, while housing sales are set to remain strong.
He says, “Home sales should be much stronger based on the economic fundamentals of jobs, interest rates, population and consumer confidence.”
After several years of wage growth outpacing home price growth, this year both are more closely aligned as average hourly wages accelerate. “With strong job creation, wages are growing at a faster pace. Finally, wages and home prices are aligning,” Mr Yun says. “This is good news for employees.”
That said, because of significant differences in home prices between metro markets, there may be a steady shift in the relocation of people and companies into more affordable regions of the country. Housing affordability has been falling according to NAR’s Housing Affordability Index.
“While affordability has been sliding, it is still better than we saw in the year 2000. This is due to much lower mortgage interest rates today,” Mr Yun says.
Danielle Hale, Chief Economist at realtor.com®, predicts that year-over-year inventory growth will be moderate nationwide. Realtor.com® has seen listing prices up 6.9% year-over-year in April. Other measures also show that higher income households have more access to available inventory.
“We used to see home price growth only around the coasts, but now we’re seeing it throughout the country. Nationwide there are not enough affordable homes on the market, and those numbers have been declining,” says Ms Hale.
The National Association of Realtors® is America’s largest trade association, representing more than 1.3 million members involved in all aspects of the residential and commercial real estate industries.