Chief economist of NAR Dr. Lawrence Yun shared statistics about the prior year in real estate and some predictions for the coming year in a private video call yesterday. Here are some highlights:

• Average age of first-time homebuyers in 2023 – 35
• Average distance moved – 50 miles (the highest since they began tracking this statistic in 1981)
• Desirability levels between rural and urban locations switched during Covid and have not normalized. Rural properties remain more highly sought-after than in the past, and urban less so.
• Nationwide, there is 18% more housing inventory than at this time last year. In Illinois, that number is only 2-3%. However, some states such as Florida and Texas are approaching a 50% inventory increase! (This is more a reflection of how low inventory was last year than how high it is this year.)
• 2023 saw the lowest number of home sales in 30 years, despite the population increasing by 70 million people in that time.
• The Fed is “eager” to cut rates, but interest remains too high.
• Dr. Yun predicts maybe 4, 5, or even 6 rate cuts by the end of 2025. We will likely see rates drop to 6%, maybe even 5.5%. Definitely not 3% again, barring an unforeseen event.

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The “core” inflation rate in May dropped to its lowest reading since spring 2021. When and how much the Fed drops its benchmark interest rate depends mostly on what happens to inflation. Though far down from 2 years ago, it is still running higher than the Fed’s 2% target.

The U.S. median house sales price jumped in May to its highest point ever, $424,500, surpassing its previous peak at the end of the pandemic boom.