Dr. Lawrence Yun, Chief Economist for the National Association of REALTORS®, presents the residential economic outlook for Chicago in 2024.

1. #CAROutlook

2. 30
Real Estate
Market
Outlook
Lawrence Yun, Ph.D.
Chief Economist
NAR

3. Annual Existing Home Sales:
18% decline and 18% decline
On Track for Worst Year since 2008 or 1993
Source: NAR
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
8,000,000 1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
F
Seasonally adjusted annualized sale pace

4. 0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
2008 2011 2014 2017 2020 2023
Source: NAR forecast and HUD
New Home Sales up 3.9%
year-to-date to November
On Track for 3rd best year since 2008 foreclosure year

5. Source: NAR and HUD
Inventory of
Existing Homes Low ... New Homes High

8. 0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
2019
- Jan
2019
-
Mar
2019
-
May
2019
- Jul
2019
- Sep
2019
- Nov
2020
- Jan
2020
-
Mar
2020
-
May
2020
- Jul
2020
- Sep
2020
- Nov
2021
- Jan
2021
-
Mar
2021
-
May
2021
- Jul
2021
- Sep
2021
- Nov
2022
- Jan
2022
-
Mar
2022
-
May
2022
- Jul
2022
- Sep
2022
- Nov
2023
- Jan
2023
-
Mar
2023
-
May
2023
- Jul
2023
- Sep
2023
- Nov
2024
- Jan
30-year Mortgage and
Fed Funds Rate ... Likely Peaked
Source: U.S. Treasury and Federal Reserve

9. 0.00
1.00
2.00
3.00
4.00
5.00
6.00
2021 - Jan 2021 - Jul 2022 - Jan 2022 - Jul 2023 - Jan 2023 - Jul 2024 - Jan 2024 - Sep
Fed Funds Rate .. How many rate cuts
in 2024? 3 or 4 or 5 times
Source: Federal Reserve and NAR Forecast

10. 0
1
2
3
4
5
6
7
8
9
10
2019 -
Jan
2019 -
Apr
2019 -
Jul
2019 -
Oct
2020 -
Jan
2020 -
Apr
2020 -
Jul
2020 -
Oct
2021 -
Jan
2021 -
Apr
2021 -
Jul
2021 -
Oct
2022 -
Jan
2022 -
Apr
2022 -
Jul
2022 -
Oct
2023 -
Jan
2023 -
Apr
2023 -
Jul
2023 -
Oct
2024 -
Jan
% change from a year ago
Overall Consumer Price Inflation
at 3.4% in December
Source: BLS

11. 0
1
2
3
4
5
6
7
2019 -
Jan
2019 -
Apr
2019 -
Jul
2019 -
Oct
2020 -
Jan
2020 -
Apr
2020 -
Jul
2020 -
Oct
2021 -
Jan
2021 -
Apr
2021 -
Jul
2021 -
Oct
2022 -
Jan
2022 -
Apr
2022 -
Jul
2022 -
Oct
2023 -
Jan
2023 -
Apr
2023 -
Jul
2023 -
Oct
2024 -
Jan
% change from a year ago
Source: BLS
“Core” Consumer Price Inflation
3.9% in December
Lowest since May 2021

12. 0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023
Source: NAR forecast and HUD
Multifamily Housing Starts
3 years of cyclical highs

13. 0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
2022 Q1 2022 Q2 2022 Q3 2022 Q4 2023 Q1 2023 Q2
%
Source: CoStar
Apartment Rent Growth in
Private Sector Data

14. 0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
2022 Q1 2022 Q2 2022 Q3 2022 Q4 2023 Q1 2023 Q2
Official Government Data
Unofficial Private Sector Data
Source: BLS and CoStar
Rents Strengthening or Softening?

15. 3.0
3.5
4.0
4.5
5.0
5.5
Jan 02
2023
Jan 16
2023
Jan 30
2023
Feb 13
2023
Feb 27
2023
Mar
13
2023
Mar
27
2023
Apr 10
2023
Apr 24
2023
May
08
2023
May
22
2023
Jun 05
2023
Jun 19
2023
Jul 03
2023
Jul 17
2023
Jul 31
2023
Aug
14
2023
Aug
28
2023
Sep 11
2023
Sep 25
2023
Oct 09
2023
Oct 23
2023
Nov
06
2023
Nov
20
2023
Dec 04
2023
Dec 18
2023
Jan 01
2024
%
Source: U.S. Treasury
10-year Treasury yield – Pivoting down
Rising 1st week of 2024 after 2 months of decline

16. 0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
8,000,000
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 F
$ million
Source: Congressional Budget Office
But Risk of Higher Rates from Budget Deficit
Federal Outlay (blue bar) > Tax Receipts (orange line)

17. Total Payroll Jobs
5 million more compared to pre-covid highs
100000
110000
120000
130000
140000
150000
160000
170000
2020
-
Jan
2020
-
Feb
2020
-
Mar
2020
-
Apr
2020
-
May
2020
-
Jun
2020
-
Jul
2020
-
Aug
2020
-
Sep
2020
-
Oct
2020
-
Nov
2020
-
Dec
2021
-
Jan
2021
-
Feb
2021
-
Mar
2021
-
Apr
2021
-
May
2021
-
Jun
2021
-
Jul
2021
-
Aug
2021
-
Sep
2021
-
Oct
2021
-
Nov
2021
-
Dec
2022
-
Jan
2022
-
Feb
2022
-
Mar
2022
-
Apr
2022
-
May
2022
-
Jun
2022
-
Jul
2022
-
Aug
2022
-
Sep
2022
-
Oct
2022
-
Nov
2022
-
Dec
2023
-
Jan
2023
-
Feb
2023
-
Mar
2023
-
Apr
2023
-
May
2023
-
Jun
2023
-
Jul
2023
-
Aug
2023
-
Sep
2023
-
Oct
2023
-
Nov
2023
-
Dec
In thousands
Source: BLS

18. Monthly Payroll Job Gains
0
100
200
300
400
500
600
700
800
900
1000
2021
- Jan
2021
- Feb
2021
- Mar
2021
- Apr
2021
-
May
2021
- Jun
2021
- Jul
2021
- Aug
2021
- Sep
2021
- Oct
2021
- Nov
2021
- Dec
2022
- Jan
2022
- Feb
2022
- Mar
2022
- Apr
2022
-
May
2022
- Jun
2022
- Jul
2022
- Aug
2022
- Sep
2022
- Oct
2022
- Nov
2022
- Dec
2023
- Jan
2023
- Feb
2023
- Mar
2023
- Apr
2023
-
May
2023
- Jun
2023
- Jul
2023
- Aug
2023
- Sep
2023
- Oct
2023
- Nov
2023
- Dec
In thousands
Source: BLS

19. Job Gains Since Pre-Covid Record High Payroll Employment
(% change from March 2020 to November 2023)
Source: NAR Analysis of BLS data

20. 3,000
3,100
3,200
3,300
3,400
3,500
3,600
3,700
3,800
3,900
2017 -
Jan
2017 -
Apr
2017 -
Jul
2017 -
Oct
2018 -
Jan
2018 -
Apr
2018 -
Jul
2018 -
Oct
2019 -
Jan
2019 -
Apr
2019 -
Jul
2019 -
Oct
2020 -
Jan
2020 -
Apr
2020 -
Jul
2020 -
Oct
2021 -
Jan
2021 -
Apr
2021 -
Jul
2021 -
Oct
2022 -
Jan
2022 -
Apr
2022 -
Jul
2022 -
Oct
2023 -
Jan
2023 -
Apr
2023 -
Jul
2023 -
Oct
In thousands
Payroll Jobs in
Chicago-Naperville-Arlington Heights
Source: NAR

21. Home Price Appreciation since Covid Arrival
(% change from 2020 Q1 to 2023 Q3)
Source: NAR Analysis of FHFA Home Price Index

22. $7,300 $10,400
$295,500
$396,200
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
$400,000
$450,000
2019 2022
Renters Homeowners
Wealth Comparison between
Owners and Renters
Source: Median Net Worth from Federal Reserve Survey of Consumer Finance

23. Mortgage Rates to Fall?
30-year Fixed Rate to be 6% to 7% by the early
spring
1. Rents will calm down further ... Holds down
CPI ... and allow the Fed to cut interest rates
2. Community banks are suffering from high
interest rates
3. Spread with government bond with a return
to normal

24. 0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
Mortgage Rate
(before the Fed
Rate Cuts)
could be
6.1% to 6.6%
The Spread between 10-year Treasury
and 30-year Mortgage
(% point difference)
Source: NAR Analysis of InterestRates

25. Pent-Up Delayed Sellers Cannot
Wait Longer
What happens over 2 years?
• 7 million new-born babies
• 3 million marriages
• 1.5 million divorces
• 7 million turn 65 years old
• 4 million deaths
• 4 million net new jobs
• 50 million job switches

26. 0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
8,000,000
2019 2020 2021 2022 2023 F 2024 F
Total Home Sales:
Bottoming This Year Before Upturn Next Year
New Sales up 19% and Existing Home Sales up 13%
Source: NAR forecast and HUD

27. • Lawsuit on Buyer Representation
• Government Shutdown
• Community Banks
• International Buyers
Risks

28. Down Payment % of Home Price
0% 16% of buyers
1% to 5% 22% of buyers
6% to 10% 16% of buyers
11% to 20% 20% of buyers
More than 20% 26% of buyers
First-time Homebuyer Down Payment
Source: NAR

29. Hardest Part of Buying
(more than one answer permitted)
% of First-time buyers
Finding the Right Property 61% of buyers
Saving for Down Payment 38% of buyers
Understanding the Process 38% of buyers
Paperwork 23% of buyers
Getting a Mortgage and Appraisal 17% of buyers
Source: NAR
First-time Homebuyer Challenges

30. Would Homebuyer Use the Same Agent Again
or Recommend to Others?

31. First-time Buyer % breakout
White 69%
Hispanic 7%
Black 7%
Asian 6%
Other 6%
Source: NAR
First-time Home Buyers Race/Ethnicity

32. Home Seller % breakout
White 89%
Hispanic 5%
Black 4%
Asian 3%
Other 2%
Source: NAR
Home Seller Race/Ethnicity

33. Thank You !