{"id":71236,"date":"2022-08-08T09:20:31","date_gmt":"2022-08-08T13:20:31","guid":{"rendered":"https:\/\/blog.myewm.com\/?p=71236"},"modified":"2022-08-08T09:20:31","modified_gmt":"2022-08-08T13:20:31","slug":"nars-yun-any-economic-downturn-likely-mild","status":"publish","type":"post","link":"https:\/\/blog.myewm.com\/?p=71236","title":{"rendered":"NAR\u2019s Yun: Any Economic Downturn Likely Mild"},"content":{"rendered":"

The chief economist pointed to signs of a recession \u2013 and signs that suggest no recession. At the least, he says, the latter should block a major economic slowdown.<\/span><\/strong><\/p>\n

\n

WASHINGTON \u2013 The country isn\u2019t officially in a recession yet, despite two consecutive quarters of national contraction of the gross domestic product, a commonly cited indicator of an economic downturn, says Lawrence Yun, chief economist for the National Association of Realtors\u00ae (NAR). And even if the nation is facing an official recession, several healthy economic trends \u2013 including a robust job market, coupled with new efforts to boost affordable housing \u2013 could stave off a more serious slump.<\/p>\n

New guidance from the Treasury enables state and local governments to use leftover emergency funding from the American Rescue Plan to create affordable housing. Yun says that should help ease the inventory crisis and counteract the effects of a tightening economy.<\/p>\n

Still, there are questions about U.S. \u201cstagflation,\u201d a period of high inflation combined with an economic slowdown. But the National Bureau of Economic Research \u2013 the council that watches over U.S. business cycles \u2013 still hasn\u2019t declared an official recession, Yun notes.<\/p>\n

Major factors counteracting current slowdown conditions<\/h3>\n
    \n
  1. Job creation is robust<\/strong>. Total payroll jobs were over 150 million in early 2020 before the onset of the pandemic, Yun said at NAR\u2019s Real Estate Forecast Summit<\/a> last week. While COVID-19 shutdowns precipitated a steep decline in jobs, each month showed strong job creation after the restrictions were lifted. Though there is variation across the country, Yun says, the job market has largely recovered.\u201cWe are essentially at the same level of jobs and W-2 employment now compared to pre-COVID days,\u201d he said. Data from the Bureau of Labor Statistics shows that right now, there are more job openings than unemployed people. As of June, there were 5.9 million workers searching for jobs and over 10 million job openings. So, while high unemployment typically characterizes a recession, \u201cthe ratio [today] is almost two to one,\u201d Yun said.\u201cIt\u2019s a very unusual recession \u2013 if we are in one.\u201d<\/li>\n<\/ol>\n
      \n
    1. Commercial real estate is growing<\/strong>. Though a recession typically means bad news for commercial properties, the commercial market as a whole is flourishing despite a stagnant office sector, Yun writes in a recent Realtor Magazine column<\/a>. Rental demand is booming, and rents are up significantly. Demand for warehouse space has surged as retailers stock up to avoid supply chain disruptions. Hotel bookings, air travel and park attendance are now above pre-pandemic levels. All of this increased activity has led to high demand for new commercial construction.\u201cThe improving construction sector means that any recession will be mild,\u201d Yun said.<\/li>\n<\/ol>\n

      Despite the positive economic signs, falling homes sales remain a concern.<\/p>\n

      \u201cHome sales are down largely because mortgage rates have risen sharply,\u201d Yun said at last week\u2019s event. \u201cIf interest rates rise further, then home sales will decline even more \u2013 even if there is no recession.\u201d<\/p>\n

      One long-term solution is to increase housing supply, which is why the Treasury\u2019s announcement is meaningful. The change in American Rescue Plan guidance could mean significantly more funds going to housing supply and a reduction in costs for buyers over time.<\/p>\n

      Another factor that will help in the short term is employers finding a way to match workers to openings and fill jobs, Yun said. \u201cWe still need workers. In an environment with rising mortgage rates, what will drive homes sales is jobs.\u201d<\/p>\n

      By Catherine Mesick<\/em><\/p>\n

      Source: National Association of Realtors\u00ae (NAR)<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

      The chief economist pointed to signs of a recession \u2013 and signs that suggest no recession. At the least, he says, the latter should block a major economic slowdown. WASHINGTON \u2013 The country isn\u2019t officially in a recession yet, despite two consecutive quarters of national contraction of the gross domestic product, a commonly cited indicator […]<\/p>\n","protected":false},"author":1401,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_expiration-date-status":"saved","_expiration-date":0,"_expiration-date-type":"","_expiration-date-categories":[],"_expiration-date-options":[]},"categories":[9,59],"tags":[],"_links":{"self":[{"href":"https:\/\/blog.myewm.com\/index.php?rest_route=\/wp\/v2\/posts\/71236"}],"collection":[{"href":"https:\/\/blog.myewm.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.myewm.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.myewm.com\/index.php?rest_route=\/wp\/v2\/users\/1401"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.myewm.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=71236"}],"version-history":[{"count":3,"href":"https:\/\/blog.myewm.com\/index.php?rest_route=\/wp\/v2\/posts\/71236\/revisions"}],"predecessor-version":[{"id":71239,"href":"https:\/\/blog.myewm.com\/index.php?rest_route=\/wp\/v2\/posts\/71236\/revisions\/71239"}],"wp:attachment":[{"href":"https:\/\/blog.myewm.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=71236"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.myewm.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=71236"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.myewm.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=71236"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}