NAR Chief Economist Predicts ‘Unseasonably Hot Winter for Home Sales’
By: Charles Sells
When the United States housing market heads into the holiday season, home sales usually start to cool off. After all, most people do not want to pack up and move while everyone else is singing “Home for Christmas” and putting up sparkling lights! This year, however, things are likely to be different. This should surprise exactly no one since, well, nothing in the last 22 months or so has been anything closely resembling “business as usual.” In keeping with what appears to be the new normal, the U.S. housing market appears poised to be “unseasonably hot” this winter, and National Association of Realtors (NAR) chief economist Lawrence Yun is predicting sales comparable to pre-pandemic winters “going back all the way to 2006.”
In late November, Yun predicted that the pandemic-fueled purchasing momentum lasting from March to October of this year would continue despite tight inventories and the holiday season. “Compared to other past winter seasons, this winter season’s sales activity will be stronger,” he said. “This winter, there will be more sales compared to pre-pandemic winters going all the way back to 2006.”
Danielle Hale, the chief economist at Realtor.com, chimed in, saying, “Although there are fewer buyers in the winter months than in the competitive spring and summer period, all signs suggest that housing demand remains high.”
For buyers and sellers, much of the housing market activity has to do with a feeling of haste inspired by housing shortages and extremely short times on the market in most markets nationwide. In fact, in October, four of every five homes listed were on the market for less than a month. In high-demand areas in particular, this means that sellers worried about getting top dollar in today’s hot market feel they cannot afford to wait for a potentially more competitive spring buying season – especially when winter remains so very warm.
Yun agrees. With interest rates rising and set to rise further in the New Year, many buyers are hurrying to lock in rates and buy a big real estate present for Christmas rather than wait and find out they cannot afford the payments on the house of their dreams. Yun warned that home price increases are already starting to level off. “The days of fast price gains are over. There were be a few pockets of the market where bidding wars do occur,” he said, noting that home prices will still “generally be higher price compared to one year ago, but maybe a bit lower compared to what occurred in the summer [of 2021].”