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

By klrw460 March 20, 2024

Dr. Jessica Lautz, Deputy Chief Economist and Vice President of Research at the National Association of REALTORS® (NAR), provided testimony before the House Committee on Financial Services Subcommittee on Housing and Insurance regarding the state of the housing market. In her presentation titled “The Characteristics and Challenges of Today’s Homebuyers,” Lautz discussed NAR’s findings on existing-home sales, revealing a significant downturn in 2023 with the lowest sales recorded since 1995. Despite a slight uptick in January 2024, challenges such as limited inventory and reduced housing affordability have hindered the market’s recovery.

Lautz highlighted the competitive nature of the current housing market, underscored by frequent bidding wars due to the ongoing shortage of available homes. NAR’s January 2024 data indicated an average of 2.7 offers on homes, with 16% selling above the listing price. This scarcity of inventory has consequently driven up home prices, further excluding potential buyers from the market.

A particular focus of Lautz’s testimony was on the difficulties faced by first-time homebuyers, who are entering the market at an older age and with significantly higher household incomes than in previous decades. She noted that first-time buyers made up only 32% of primary residence purchases last year, a figure below the historical norm of 40%. This demographic shift points to broader issues of affordability and access to homeownership.

Lautz also touched upon the long-term benefits of homeownership, which extends beyond financial gains to include educational, health, and community advantages. She underscored the disparity in wealth accumulation between homeowners and renters, with homeowners typically possessing 40 times the wealth of renters. This wealth enables homeowners to afford college for their children, fund home improvements, support retirement, or help their children buy homes of their own.

The hearing also included representatives from the Mortgage Bankers Association and the National Fair Housing Alliance, reflecting a broad concern for the state of the housing market and the challenges facing today’s homebuyers. The testimony from Lautz and others underscores the ongoing efforts by NAR and its 1.5 million members to facilitate homeownership across the United States, aiming to overcome the hurdles of affordability and inventory to sustain the American Dream of home ownership.

For the full details and insights, please refer to the original press release at the following link: https://www.nar.realtor/newsroom/nar-highlights-dire-lack-of-housing-affordability-and-inventory-in-congressional-testimony