Lawrence Yun, chief economist for the National Association of Realtors, shared the above slide at last weekend's NAR conference in San Diego.

In regards to the tax credit, he said:

• It has raised sales by 350,000 to 400,000 units in 2009 so far in first time homebuyers.
• In 2010, he expects the extension and expansion will give existing home sales a 15% boost, and home prices a 3 to 5% boost, so almost a 20% increase to industry overall.
• Preservation of middle class wealth is really what the homebuyer tax credit is about.
• Tax credit is “trying to neutralize pessimism.”

Other trends/comments he shared:

- We have had 8 straight months of pending sales activity increases through September 2009.

- Aggregated supply has dropped to 8 months of inventory. Traditionally when supply gets to 6 months of inventory we have 3 to 5% home value increases, which was the norm in the past.

- “A boring market is not necessarily bad.”

- Showing potential pent-up demand, pre-boom 2001 – 11 million renters existed with qualifying income to buy a median priced home. In 2009, 16 million renters exist with qualifying income to buy a median priced home, but most renters aren’t qualified and should not be homeowners.

- “Home value is key to everything.” If the rate of home value loss slows, that will be good. If not, we will have bigger problems.

- Unemployment rate will probably go up in the next 3 to 4 months, then level off and start to drop very gradually.

- He stated “we are coming out of a recession.”

- Mortgage rates will be somewhat higher next year. 2009 average of 5.2%, 2010 average expected to be 5.7%.