HOUSTON — In late 2018 and early 2019, when Congress set a record for the longest government shutdown — a record that was just broken — home sales skidded to a near halt.
But when the government reopened, “boom, it came back,” Lawrence Yun, chief economist for the National Association of Realtors, said.
Yun said he expects a similar rebound when data begins rolling in after the 43-day government shutdown that just ended this week.
“I bet you will see more activity based on what has happened in the past reopening of the government shutdown situation,” Yun said.
That rebound should pave the way for a stronger home sales market across the board in 2026, Yun told thousands of attendees at NAR’s NXT conference in Houston on Friday.
NAR is forecasting a 14 percent growth in total home sales next year, with median prices rising 4 percent compared to this year’s 3 percent price growth. Yun has also long expected mortgage rates to settle around 6 percent, though rates have been notoriously difficult to predict accurately.
On Friday, Yun went on to tell real estate professionals to set their calendars for Thursday, Nov. 20, at 8:30 a.m., when jobs data that was delayed due to the government shutdown is set to be released. Recent jobs data has been weak.
Meanwhile, the Fed has been using rates to battle inflation. Though 30-year mortgage rates aren’t directly tied to the federal funds rate, the two generally follow a similar pattern. The Federal Reserve Board has made recent cuts to the rate — and has what Yun said was a roughly 50/50 chance of cutting again this year.
Jobs and inflation are competing forces that influence whether the Fed continues lowering the federal funds rate. So far, inflation is not under control and remains around 3 percent — above the Fed’s goal of 2 percent.
However, Yun said he’d still wager December brings a lower rate.
“My bet is I would say they will make a cut in December and probably two more next year,” Yun said.
Wall Street will watch all of that, Yun said, along with longer-term changes in government spending and the federal deficit, which has ballooned in recent years.
During his time on stage, Yun also showed a graph of historic gold prices. Investors have poured money into gold as a hedge against inflation in recent years, sending the price of an ounce of gold to all-time highs of over $4,000.
Real estate, Yun said, is a similar hedge.
“Use this chart in your real estate transactions for those who say, ‘I’m [not] going to buy a home [until] after the price crash,’” Yun said. “Well, to the degree that real estate has also served as an inflation hedge…at least at the minimum, real estate prices cannot crash when inflation is not totally under control.”
