U.S. home price increases should soften this year, but central Ohio homebuyers might not see much relief, according to one of the nation's best-known housing economists.
Lawrence Yun, chief economist with the National Association of Realtors, delivered his largely rosy forecast to the Ohio Bankers League on Wednesday.
Strong job growth, pent-up demand, low mortgage rates and new household formation will keep the housing market strong in 2020, Yun said.
Still, he said he expected home prices to rise only 3.6% this year, on par with historic increases but less than half the 7.8% bump in 2019.
Home shoppers in Columbus, however, might not see much moderation in prices: The area is one of 10 metro areas projected to outperform the national housing market over the next three to five years, Yun noted.
Columbus was the only Midwestern city to make the list, largely because of its population and job growth and its relative affordability, Yun said after the presentation.
"Columbus homes may seem expensive for people living here, but it's very affordable compared to other markets," he said.
The median sales price of a central Ohio home was $209,900 last year, 7.6% above 2018 and the fourth straight year prices have risen at least 6%.
Despite concerns that homes are increasingly unaffordable in central Ohio, the opposite is true: There are so many qualified buyers that they compete for homes, pushing up prices and pushing down inventory.
At the end of 2019, 3,886 central Ohio homes were on the market, half the number of listings just four years earlier.
The shortage of homes on the market is one of the reasons housing isn't booming more, said Yun, who estimated that the U.S. has a shortage of 5 million to 6 million new homes.
"That is why we have an inventory shortage," he said. "We need to build more homes."
Yun said he thought the U.S. economy could grow 3% this year, but forecast a more modest 1.6% growth, in part because of some concerns: the threat of a trade war; the growing federal deficit; and growing consumer debt including student loan debt.
"There's very little chance, close to a zero chance, of recession this year," he said.
