NAR Chief Economist: Homeowners Prospering Despite Sluggish Real Estate Sales

Real Estate Market Turnaround

• 📈 Home sales in November showed a small increase, potentially signaling a turn after three years of sluggish activity.
• 🏠 Despite low sales, homeowners are benefiting with home prices rising approximately 50% from pre-COVID levels.

Factors Affecting Sales Activity

• 📉 The primary driver of the sales slump has been the Federal Reserve's aggressive interest rate hikes in 2022, pushing mortgage rates from 3-4% to 8%.
• ⚠️ This sharp increase in mortgage rates significantly impacted housing affordability and reduced transaction volume.
• 📦 A lack of supply has also contributed to the low number of transactions.

Emerging Positive Trends

• 📉 Mortgage rates have recently trended downwards, nearing three-year lows.
• 📦 More inventory is becoming available on the market.
• 💰 Wage growth is now outpacing home price growth, which is improving affordability.

Outlook for 2026

• ✨ All indicators suggest that the real estate market is moving in the right direction.
• 🚀 A meaningful recovery in home sales is anticipated as we enter 2026.