Lawrence Yun, the Chief Economist for the National Association of REALTORS® (who, by the way, received his Master’s degree from University of Maryland), spoke to our local REALTORS® Association recently.  Now, if you’re like me, you think “oh no – economists speak a different language than me.”  Lawrence is an exception.  As I have told him on numerous occasions, he does a spectacular job of presenting the information, and then “dumbing it down” so we, REALTORS®, can understand it.  In his abbreviated talk, he pointed out some positive things about the housing market.  One thing he said is that he feels that interest rates have peaked and appear to be on their way down.  He’s expecting rates to be around 6% by the Spring.  Great news for buyers...and sellers!

For those who are renting, he expects rents to calm down.  But here’s an interesting fact…in 2022, the “net worth” of renters was $10,400 (it was $7,300 in 2019), while the “net worth” of Homeowners is $396,000 (it was $295,500 in 2019).  Why such a discrepancy?  The main reason is that owning a home builds equity that goes towards “net worth.”  Renters don’t get that benefit.

We’re still suffering a low housing inventory.  A good part of that is because many people, including myself, refinanced homes in the 3% rate, and don’t want to move because they’d have to pay more, simply because of current interest rates.  Personally, I’ve always said that I’m not going anywhere unless life dictates it.  I think those with a lower interest rate have that same thought.  Here are some facts about the next two years:

• 7 million newborn babies

• 3 million marriages

• 1.5 million divorces

• 7 million will turn 65 years old

• 4 million deaths

• 50 million job switches

The upshot of this is that life will indeed dictate that people will need to move, and  more houses will be coming on the market.  

Sounds like a pretty good forecast to me. And who says economists are boring, anyway?