Cognitive dissonance: The guy who’s supposed to be the real estate industry’s biggest cheerleader is warning that home prices can’t keep rising at their current clip.
Yesterday the Case-Shiller S&P home price index notched a milestone — exceeding its July 2006 record.
Lawrence Yun, chief economist for the National Association of Realtors, says it can’t go on: “The continuing run-up in home prices above the pace of income growth is simply not sustainable. From the cyclical low point in home prices six years ago, a typical home price has increased by 48% while the average wage rate has grown by only 14%.”
Mr. Yun is also concerned about rising interest rates. A typical 30-year fixed mortgage goes for 4.66% now. That’s the highest since 2011, and way up from the most recent low at 3.78% nine months ago.
Meanwhile, CNBC reports that even while supply remains tight, demand might be weakening: Fewer potential buyers are asking for tours and making offers, according to a monthly survey by Redfin. “April was the first time in 27 months that we saw a year-over-year decline in the number of customers touring homes,” says Redfin chief economist Nela Richardson. Hmmm…