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Existing home sales continue to decline, with the annual rate reaching its lowest level since 1995.
National Association of Realtors Chief Economist Lawrence Yun joins Yahoo Finance Live to discuss what could stimulate the home buying market.
Yun argues that the housing market needs more first-time home buyers, especially young home buyers. “The age of a first-time buyer is that these days he’s in his mid-30s, but we’re hoping that the entry point is closer to his 30s,” he says.
According to Yun, the new home construction market will “exponentially increase” in 2023. Yun said this should not be taken for granted as there is still a shortage of inventory, adding: “Constructors need to urgently ramp up production.” America is experiencing a housing shortage. ”
For more expert insights and the latest market trends, click here to watch the full episode of Yahoo Finance Live.
Editor’s note: This article was written by Ike Ntekim
video transcript
Brad Smith: Lawrence, there’s a lot of energy going into home sales this morning. We’re also thinking of Redfin’s report that pending home sales increased 4% in December. They say this is the biggest increase in two years, citing that the average interest rate on a 30-year fixed mortgage actually fell from 7.44% in November to 6.82% in December. It’s out. That’s what’s drawing people back to the market here. Are there any particular demographics that you think need to re-enter the home buying market to achieve greater or lasting change?
Lawrence Yun: According to the latest data, 29% of all buyers were first-time buyers. That’s too low. We need to make sure this number is 35%.
Additionally, first-time buyers are now in their mid-30s, and we want to move that entry point, the age at which people enter the market as first-time buyers, closer to what used to be in their 30s. Please be so. Because we want homeownership opportunities, opportunities for the American Dream for more Americans starting in young adulthood in their late 20s and early 30s. So when you see that, you clearly know that you are on the right track.
Brad Smith: Lawrence, on the new housing side, we’ve been talking quite a bit about existing housing, but with new housing as well, are we still lagging behind in the number of homes we need to produce to have enough supply? How to get potential new home buyers ready to move in?
Lawrence Yun: You know the new home construction market is actually going to shrink. We can make stock, so it looks like we’ll be able to cry again this year. However, the amount of inventory created remains insufficient, especially considering the 10-year production shortage.
Therefore, to make up for a 10-year production shortfall, builders need to ramp up production quickly. America is experiencing a housing shortage. People, especially renters, are being forced to pay high rents.
Potential first-time buyers are focused on record-high home prices. The only way to alleviate price pressure is to increase supply. So everything to ensure that there’s more supply coming into the market, maybe less regulation, maybe looking at zoning rules, anything to make it easier to build that’s good for America and economic activity. is.
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