NAR Lawrence Yun Testimony to Senate Committee on Banking's State of Housing Hearing
Issue Date: July 20, 2022
117th Congress
Senate Committee on Banking, Housing, and Urban Affairs
On July 20 Lawrence Yun, Chief Economist and Senior Vice President of Research at the National Association of REALTORS® testified before the U.S. Senate Committee on Banking, Housing, And Urban Affairs for the Committee's hearing titled “Priced Out: The State of Housing In America.”
Heading into the uncertainty of the COVID-19 pandemic the historic undersupply of homes for sale—around 5.5 – 6.8 million units was well documented. Despite the initial slowdown in real estate activity due to lock downs and consumer apprehension, demand increased significantly and existing shortfalls in the market became more prominent. The ability for many to work from home led to a desire for more space and pushed up demand in areas outside major metropolitan areas nationwide. Supply chain issues that emerged over the past two years have only exacerbated shortages and slowdowns in construction of new homes. These shortages have also created significant challenges with the affordability, especially for first-time buyers looking to step up to ownership opportunities.
Homeownership is still viewed by many as part of the American Dream. Americans that owned a home before the pandemic were likely to have realized significant financial gains. On the other hand, ownership is becoming increasingly out of reach for many as the price to buy and interest rates increase and these same pressures are causing rents to increase and crowding out savings. In the near term, NAR does not expect the situation to change appreciably. While sales will likely slow down price growth is expected to continue, just at a slower rate. Historic undersupply in the market combined with continued demand will likely drive ongoing issues with affordability for many Americans.