The Housing Economy

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Instructor Peter West will share the latest information from our chief economist Lawrence Yun and Senior Economic Analyst  Jessica Lautz in our upcoming CE class, RE34RC03: National Economic Trends and the Real Estate Professional  

July 8, 2026 9:00 AM – 11:00 AM (EDT) register here

Some highlights:

  • GDP growth at 1.5% — positive but subpar 
  • AI/tech investment (data centers, chips, software) is the primary economic engine right now
    • Business investment in AI showing “hyperbolic acceleration” — holding up GDP where housing is not
  • Consumer sentiment index at historic lows — lower than 2008–2010 despite no foreclosures, low unemployment, record stock market
    • Likely capturing political sentiment, not economic reality
  • Unemployment at 4.3% —  high total employment; job creation is weak but not negative
    • 3 straight months of positive job gains recently
    • Federal workforce cuts and reduced southern border crossings both suppressing job growth
  • Wage growth ~3–4% YoY for W-2 earners; construction and leisure/hospitality growing faster
    • Tied to southern border slowdown reducing labor supply in those sectors
  • Inflation now above wage growth for past 2 months — real standard of living declining

Housing Market Outlook

  • Home sales stuck at post-COVID slump levels; YTD up less than 1% nationally
  • Home prices at record highs; distressed sales at ~1% of all transactions
  • Dollar revenue above pre-COVID levels — driven entirely by price growth, not volume
  • Median home price today: $430K; projected to reach $1M in ~25 years at 3–6% annual growth
  • Mortgage rates not falling despite stock market highs and peace deal news
    • 10-year treasury not moving down — possibly pricing in future money printing/Social Security funding concerns
    • Revised forecast: no meaningful rate drop to 6% this year; home sales recovery will be lighter than projected
  • Capital gains tax exemption increase (passed House and Senate, not yet reconciled) could unlock significant inventory
    • Would free elderly homeowners currently locked in; double the exemption proposed