Real estate economist Yun: ‘Just hang in there’

FORT COLLINS — Despite mixed economic data and significant headwinds that have become significantly more blustery since the war in Iran and the accompanying energy crunch began, National Association of Realtors chief economist Lawrence Yun is not forecasting a recession. 

“Just hang in there and I think you’re looking at better conditions” into late 2026 and beyond, he said Wednesday at BizWest’s Northern Colorado Real Estate Summit held at Colorado State University’s Fort Collins campus. 

Yun acknowledged that the feeling among a wide swath of the business community and general public is pretty gloomy, but noted that the current economic fundamentals differ from those present during the Great Recession that began in 2008 or the energy crisis of the 1970s.

On the energy front, “America is vastly producing oil” compared with 50 years ago, he said, and vehicles are much more efficient.

“We don’t have massive job losses and we don’t have a foreclosure crisis” like in 2008, but “people are expressing the sentiment that we are in a recession,” Yun said, laying some of the blame for bad vibes on social media and political division.

While the Federal Reserve Board may not lower interest rates as aggressively as some observers predicted prior to the Iran conflict, Yun said he still expects another rate cut this year. 

“That raises some of the enthusiasm and improves (consumer) financial capacity,” he said. 

In the residential real estate space, “pent-up demand” from buyers could jumpstart the sluggish market as macroeconomic conditions improve. 

Despite recent upticks, mortgage delinquencies and foreclosures remain “historically low,” Yun said, while mortgage-application figures indicate that “the desire to enter the market has been rising from last year.”

Some homeowners with lots of existing equity who would otherwise seek to sell their current houses and buy a larger place are sitting on the sidelines because they don’t want to take a significant capital-gains tax hit, he said. “One of (the National Association of Realtors’) top advocacy issues that we are talking about in Washington” is expanding capital gains tax exemptions.

The United States has more than 6 million more jobs today than during pre-COVID height, Yun said. “Record high employment should mean record high home sales,” but higher mortgage rates and low inventory have stymied the pace of activity. 

And while post-pandemic job growth was strong for a few years, “we’ve been circling near zero” in recent months, a trend he attributes, in part, to weakness in several key private industries and cuts to federal agencies. 

Even with the myriad challenges facing residential real estate developers, brokers, buyers and sellers, Yun assured the industry pros on hand Wednesday that homeownership and appreciation is still “how people build wealth.”

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