US Housing Market Faces Uphill Battle to Recover, Says Realtor.com Chief Economist

After years of repeated challenges in the real estate industry, homebuyers now face another obstacle: a shortage of housing inventory.

During an interview on 'Mornings with Maria' show, Danielle Hale, the chief economist of Realtor.com, expressed her concerns about the volume of new homes being built, stating, 'We’ve got a big hole to dig out of.'

Hale further explained, 'We do expect to see single-family construction tick up next year by about 0.4%. So not a huge gain, but construction right now is on the upper end of what we've seen it do over the last, really since 2012.'

While Hale remains optimistic about the improvement of new unit inventory, she noted that it's a 'multiyear problem.' She emphasized, 'So, if we took all that construction and put it towards filling that deficit, it's going to take us a few years to build out.'

The scarcity of new homes poses a significant challenge for first-time buyers who are still striving to achieve homeownership.

Hale shared October data that revealed a stagnation in listing prices. She stated, 'Our October data shows listing prices were flat,' and added that home prices have been fluctuating over the past few months.

Builders in the US housing market have experienced a decline in confidence for the third consecutive month in October, primarily due to the impact of rising mortgage rates on consumer demand for new homes.

Hale mentioned that home prices are expected to decline more consistently in 2024, but the shortage of inventory will limit the extent of the decline to 1.7% for the year.

Unfortunately, the challenges in the real estate sector are not limited to homebuyers. Renters are also unlikely to find relief in the form of lower costs.

Highlighting the high costs of the housing market, Hale opined, 'Relative to high costs in the housing market, I think renting is going to be an option for many families who are trying to figure out how do I save on housing costs.' She stressed, 'There really aren't a lot of ways to save on housing costs.'

As the real estate market grapples with these obstacles, it becomes paramount for individuals and families to carefully navigate housing options and plan for the future.

This report has been written based on information provided by Realtor.com's chief economist, Danielle Hale, who shared valuable insights regarding the current state of the housing market.

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