Pursuing sustainable and responsible solutions to address our nation’s housing affordability crisis will remain a steadfast priority in the new year. Our nation’s affordability challenges stem from an alarming supply/demand imbalance, and to properly address this we must build 4.3 million new apartments by 2035.
I’m optimistic that 2023’s spring selling season will be a bright spot as levels of inflation get more under control. There will still be extreme demand as new construction just can’t get out of the ground fast enough, and the Millennial home buyers, who make up a huge demographic, are primed to make their move.
Slowing inflation and the hope of the Fed easing rate hikes in the new year are likely to bring mortgage rates down further and thereby improve homebuying demand. But don’t call it a comeback or even a recovery yet; demand is still way down from its peak. We’re keeping a close eye on the labor market for confirmation that inflation will continue slowing. A strong job market like the one we have now contributes to inflation because it pushes up wages and leads to higher prices.
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