Home sales and prices are expected to rise despite inventory and affordability challenges, said U.S. National Association of Realtors (NAR) on Thursday.
Based on its midyear forecast, NAR believes that a stronger economy, wage growth and an improving job market are expected to push home sales and prices higher in 2018, while low supply and weakening affordability will tamper the rate of increases.
Lawrence Yun, NAR's chief economist, said despite headwinds, a moderate and multiyear increase in home sales is likely ahead.
"Overall fundamentals remain solid, driven by a growing economy and steady job creation, which will sustain home sales in 2018 slightly above last year's pace," said Yun.
After accelerating 3.8 percent in 2016, existing home sales rose only 1.1 percent to 5.5 million in 2017 and are forecast to finish 2018 at a pace of around 5.6 million, up 1.8 percent.
NAR projects 5.7 million sales for 2019.
"The worsening housing shortage means home prices are primed to rise further this year too, hindering affordability conditions for home-buyers in markets across the country," Yun added.
According to NAR data, total U.S. housing inventory at the end of March was 1.67 million existing homes available for sale, 7.2 percent lower than a year ago.
An acute shortage, especially of affordable inventory, will limit the rise of home sales, said experts in the trade.
Based on its midyear forecast, NAR believes that a stronger economy, wage growth and an improving job market are expected to push home sales and prices higher in 2018, while low supply and weakening affordability will tamper the rate of increases.
Lawrence Yun, NAR's chief economist, said despite headwinds, a moderate and multiyear increase in home sales is likely ahead.
"Overall fundamentals remain solid, driven by a growing economy and steady job creation, which will sustain home sales in 2018 slightly above last year's pace," said Yun.
After accelerating 3.8 percent in 2016, existing home sales rose only 1.1 percent to 5.5 million in 2017 and are forecast to finish 2018 at a pace of around 5.6 million, up 1.8 percent.
NAR projects 5.7 million sales for 2019.
"The worsening housing shortage means home prices are primed to rise further this year too, hindering affordability conditions for home-buyers in markets across the country," Yun added.
According to NAR data, total U.S. housing inventory at the end of March was 1.67 million existing homes available for sale, 7.2 percent lower than a year ago.
An acute shortage, especially of affordable inventory, will limit the rise of home sales, said experts in the trade.
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