Author Bios
Lawrence Yun is chief economist and senior vice president of Research at the NATIONAL ASSOCIATION OF REALTORS®. He directs research activity for the association and regularly provides commentary on real estate market trends for its 1.1 million REALTOR® members. Dr. Yun creates NAR's forecasts and participates in many economic forecasting panels, including Blue Chip and the Harvard University Industrial Economist Council. He appears regularly on financial news outlets and is a frequent speaker at real estate conferences throughout the United States. USA Today recently listed him among the top 10 economic forecasters in the country.
The market is looking much improved today, with home sales and prices heading up. But within this improvement are the seeds of a long-term challenge: falling inventories.
If regulators fail to restore rules that honor the important roles of free enterprise and private property ownership, some may be unable to climb the economic ladder.
Key market data at the midpoint of 2012 suggest a solid second half of the year. Existing-home and pending home sales were up more than 2 percent; home prices were up more than 9 percent on a year-over-year basis, to $187,300; and inventories were down, pointing to possible continued price growth. Distressed sales were down as a share of the market, too. All trend lines are July 2011 to July 2012.
The inventory of homes for sale peaked at 4.5 million units in 2007, fueling the big drop in home prices that we’ve seen. Today, we have the opposite problem: Only 2.49 million homes are for sale, even though demand has risen some 10 percent from a year earlier.
Existing-home sales dipped in May from the previous month to 4.55 million units, but sales remain above year-ago levels. Also, practitioner confidence in current and future housing market conditions is up from the previous month.
