Speaking at the trade group’s Legislative Meeting & Trade Expo, Yun predicted 2017 will finish with 5.64 million in existing-home sales, the best since the 2006 level of 6.47 million and 3.5 percent above the 2016 level. He added that the national median existing-home price should rise around five percent this year.
“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.”
However, Yun noted that the inventory for homes in the lower- and mid-market price ranges were limited and growing more elusive. Yun also forecast an 8.4 percent increase in home construction this year, reaching the 1.27 million level, but that would be less than the 1.5 million new homes needed to make up for the insufficient building in recent years.
“We have been under the 50-year average of single-family housing starts for 10 years now,” he continued. “Limited lots, labor shortages, tight construction lending and higher lumber costs are impeding the building industry’s ability to produce more single-family homes. There’s little doubt first-time buyer participation would improve and the homeownership rate would rise if there was simply more inventory.”