Speakers at the 2019 REALTORS Legislative Meetings and Trade Expo voiced strong expectations for the remainder of 2019, including continued economic expansion, rising home sales, and an increase in wages that are on par with the growth of home prices.
Lawrence Yun, Chief Economist at the National Association of Realtors, predicted changing future migration patterns in his 2019 midyear forecast, adding buyers search for more affordable markets. The report states inventory in the U.S. has grown for eight-consecutive months on a year-over-year basis, which Yun expects to continue.
Diverting from the recent trend, wage growth and home price growth are more closely aligned as average hourly wages continue to grow.
“With strong job creation, wages are growing at a faster pace. Finally, wages and home prices are aligning,” Yun said. “This is good news for employees.”
Yun added that this shift is a healthy development toward keeping housing affordability stable.
“While affordability has been sliding, it is still better than we saw in the year 2000. This is due to much lower mortgage interest rates today,” Yun said.
A report earlier this month from realtor.com found that while home prices in suburban areas have increased 57.3% since 2013, they pale in comparison to the 93.4% increase found within major cities.
“As more people look to the suburbs for affordability, homes are harder to find there, too,” said Danielle Hale, Chief Economist at realtor.com. “Buyers not willing to go farther out may have to make other trade-offs such as accepting a smaller home or buying a home in need of renovation.”
Hale said at the Expo that year-over-year inventory growth will be moderate nationwide, and the company has been listing prices up 6.9% year-over-year in April.
“We used to see home price growth only around the coasts, but now we’re seeing it throughout the country. Nationwide there are not enough affordable homes on the market, and those numbers have been declining,” Hale said.