NAR Highlights Dire Lack of Housing Affordability and Inventory in Congressional Testimony

Dr. Jessica Lautz discusses NAR research, confirms the housing market continues to have a deficit in housing inventory compared to housing demand.

WASHINGTON (March 20, 2024) – Dr. Jessica Lautz, deputy chief economist and vice president of research at the National Association of REALTORS®, today testified before the House Committee on Financial Services Subcommittee on Housing and Insurance.

During the hearing, "The Characteristics and Challenges of Today's Homebuyers," Lautz shared NAR's existing-home sales research with members of Congress. She emphasized that in 2023, the annual number of existing-home sales was at the lowest recorded since 1995. While January 2024 shows an increase in home sales, this follows a retraction in the housing market due to limited inventory and an erosion in housing affordability.

Lautz pointed to NAR's research, confirming that bidding wars for homes are more frequent due to the lack of housing inventory. She outlined research from the association showing that in January 2024, the typical seller received 2.7 offers, and 16% of homes sold were over the list price. Further, she explained that home prices continue to rise because of the lack of inventory, pushing more potential buyers out of the market.

"First-time home buyers continue to struggle to enter the housing market lacking the housing equity that boosts the purchasing power of repeat buyers," Lautz testified. "First-time buyers accounted for 32% of primary-residence buyers last year, which remains well under the historical norm of 40%. While there is a smaller share of first-time buyers, they are also older than they have been historically. In the 1980s, the typical first-time buyer was in their late 20s; however, they are now in their mid 30s. Among first-time buyers who can enter the market successfully are those with household incomes of nearly $25,000 more than those of the year prior."

The National Association of REALTORS® and its 1.5 million members work tirelessly to help all citizens achieve homeownership. Regardless of background, owning a home remains a pivotal cornerstone to attaining the American Dream and is a means of spurring generational wealth within families. Due to the lack of affordability, coupled with low inventory, first-time home buyers are not afforded the benefits that come with homeownership.

"The wealth held by homeowners is 40 times that of a renter," Lautz said. "Housing wealth can be used to help children attend college, pay for remodeling costs on the home, in retirement or even help their own children achieve the dream of homeownership. Homeownership also comes with a number of social benefits, such as educational achievement, civic participation, health benefits, property maintenance and improvement."

Along with NAR, representatives from the Mortgage Bankers Association and the National Fair Housing Alliance were present for the hearing.

About the National Association of REALTORS®

The National Association of REALTORS® is America's largest trade association, representing 1.5 million members involved in all aspects of the residential and commercial real estate industries. The term Realtor® is a registered collective membership mark that identifies a real estate professional who is a member of the National Association of REALTORS® and subscribes to its strict Code of Ethics.

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