SAN FRANCISCO – (Realty News Report) – Houston’s housing market remains resilient even after Hurricane Harvey, according to Lawrence Yun, chief economist of the National Association of Realtors.
“Houston is one of the stronger markets in the country, with both home sales and prices on the rise,” Yun said.
Speaking at NAR’s Residential Economic Issues & Trends Forum during the association’s annual conference in San Francisco — an event attended by more than 20,000 Realtors — Yun noted that Texas overall is outperforming the national average in job growth.
Yun described the national outlook as generally positive. “We will not see a recession, and we expect baseline GDP growth of about 1.5 percent for 2020,” he said.
While some analysts argue that the nation is “due for a recession” after more than a decade without one, Yun disagrees. He says current economic conditions are stronger than those that preceded prior recessions.
At the same time, Yun emphasized the need for more housing construction. “Historically, periods that required increased building were not accompanied by recessions,” he said. “That should incentivize builders to start more projects. If they do, I believe we can extend economic expansion for at least 12 consecutive years.”
Yun expects both new and existing home sales to rise, driven by low unemployment and job creation across the country. “Every state is adding jobs,” he said. “Some states are growing faster than others, but job creation is widespread. Combined with lower mortgage rates, this is helping first-time buyers enter the market.”
On interest rates, Yun said borrowing costs are likely to remain low while the government continues to support mortgage-backed securities. He cautioned, however, that rates could rise if inflation accelerates and economic activity strengthens. His forecast projects typical mortgage rates staying below 4 percent through 2020.
“Mortgage rates tend to respond to communication as much as to policy itself,” Yun added. “In past years, rates dropped based on signals from the Federal Reserve even before policy changes were implemented.”
Yun reiterated that the nation has underbuilt housing for years, contributing to higher costs for buyers. Increasing construction would help relieve pressure on prices and support continued market stability.
Nov. 11, 2019 Realty News Report Copyright 2019
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