Speaking at the 2013 Realtors Conference & Expo Friday, National Association of Realtors (NAR) chief economist Lawrence Yun predicted steadiness in existing-home sales over the next year as prices continue to ascend.
Looking over the past year, Yun said he expects existing-home sales to be up about 10 percent in 2013 to 5.13 million. Sales in 2014 are expected to hold fairly even at about 5.12 million.
Reviewing price movements, he said the national median existing-home price should end this year about 11 percent higher than 2012, climbing to $197,000. Next year’s growth is expected to be cut nearly in half at about 6 percent.
Over the past two years, Yun says existing-home sales have shown a 20 percent cumulative increase, while prices have gained 18 percent. Meanwhile, incomes have only barely risen, coming up somewhere between 2-4 percent.
“We’ve come off of record high housing affordability conditions in the past year, and are now at a five-year low, but conditions are still the fifth best in the past 40 years,” Yun said, noting that the median-income family should still be “well-positioned” to buy a home in 2014 in many areas.
Aside from affordability, ongoing headwinds include limited inventory conditions and stringent mortgage standards, both of which are expected to continue as housing starts struggle and business costs remain elevated for lenders.
On housing production, Yun forecasts 917,000 starts through the end of 2013 and 1.13 million in 2014, which still falls short of the underlying demand of about 1.5 million.
Sales of new homes are expected to total 429,000 in 2013 and 508,000 next year.
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