National Association Of Realtors Economist Discusses Housing Crisis

Nadia Evangelou, Senior Economist and Director of Forecasting at the National Association of Realtors, spoke to The Daily Wire about the group’s recent study on the rising home prices and low supply of homes.

The study from the National Association of Realtors (NAR) was released Monday, as The Wall Street Journal reported, showing how the rise in the cost of homes and a steep drop in the number of houses being sold have had an effect on many Americans when it comes to buying houses. 

As The Daily Wire reported, the study showed that at the end of 2021, there were around 411,000 fewer houses on the market that were thought to be affordable for households making between $75,000 and $100,000 than prior to the COVID-19 pandemic. “At the end of 2019, there was one available listing that was affordable for every 24 households in this income bracket. By December 2021, the figure was one listing for every 65 households,” the Journal noted. 

“The study, the first of its kind from NAR, calculated affordability for different income tiers by assuming households use a 30-year fixed-rate mortgage and don’t spend more than 30% of their income on housing costs, including taxes and insurance,” the outlet added. 

The NAR study didn’t just look at the regular methods of accounting for “housing affordability,” but it also considered the supply of houses for sale at different costs. It discovered that “housing affordability” got worse over the past two years for everyone except for Americans at the top of the income bracket. Every income group suffered, however, as the number of homes being sold went down. 

Nadia Evangelou told The Daily Wire that “across the board, across the income groups, we see that middle class home buyers are the most impacted than any other income group.”

“So to answer the question of how this report can be helpful to home buyers is that it provides an estimate of how many homes are out there available for them to buy and how many households may compete for each of these listings,” she added. 

She also said she was slightly surprised because expensive areas like San Francisco, San Jose, Honolulu, and Washington, D.C., are more affordable now compared to before the pandemic. 

“Looking at the data,” she said, “what we see is that home prices have also increased significantly in these areas,” however higher incomes paired with low mortgage rates seem to have impacted affordability.

“For example,” she explained, “the income of the typical household rose about 15% San Jose and about like 13% San Francisco compared to 2019.”

She also noted how “in the first year of the pandemic, like in 2020, especially in the summer, many people were fleeing away from [these] big and expensive areas. So home prices were rising slower there compared to other areas during the time.”

“But what is also interesting is that even though these households can afford to buy … a greater percentage of the homes, there are still fewer options for them there to buy due to record low inventory so there are fewer homes for them to buy,” she added. 

She said NAR identified in which areas buyers are most likely to find a home to buy. She said that Daytona, Florida, had around one listing available for every 31 households. Des Moines, Iowa, and Atlanta, Georgia, had one listing available for nearly 35 households, and Miami had around one listing for around every 38 households, which are all better than the national level which is one listing for every 65 households. 

Evangelou also said that they have seen a trend of people moving away from expensive areas to more affordable areas, such as smaller cities or suburbs. She acknowledged that existing homeowners have it easier than first time home buyers because first time homebuyers don’t have equity in a house.

When asked about the trend of home prices over the next year, Evangelou noted they “expect about 5.9 million units to be sold in 2022,” which she said is around a 10% increase from 2019, but when compared to 2021 it will be a drop around 2%. 

She said home buying activity will slow down compared to 2021, and they expect home prices to rise although at a slower pace.

She pressed that “this is not going to be a price drop … they will still rise but at a slower pace.”

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