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Existing home sales edging lower in April down half a percent compared to the month prior, according to the National Association of Realtors. For more on what this signals about the health of the housing market, I'm joined by Lawrence Yoon, who is the National Association of Realtors chief economist here. So, let's just start there, Lawrence, and great to check in with you, as always here. What exactly does this signal right now about the health of the housing market?

Well, we are just getting started in the spring home buying season, uh, critical months, uh, for the home sales activity, uh, which happens, you know, from spring all the way to late summer, uh, and the current activity at 4 million, this is 75% level of normal. Now, pre-COVID, we had home sales running at above 5 million, but now we are running at 4 million. And this is due to the fact that not that people do not want to buy home, but affordability challenges. We know that jobs have been constantly being added to the economy, job growth always accumulates potential home buyers, but they are unable to get into the market because of elevated mortgage rates. So that's where we are currently.

So, so what's the treatment then, after such a diagnosis as the health right now of the housing market versus what needs to take place to get mortgage rates down? I mean, President Trump campaigned on 3% mortgage rates. It doesn't seem like we're going to get down to that anytime soon.

Well, the, uh, during the first term of President Trump, mortgage rates average 4% to 5%. That was under first term President Trump. Right now, mortgage rates are 7%, uh, clearly much, much higher, uh, and it's not going to go back to 3%, 4%, 5%. It may get to 6% if we can get the budget deficit under control. Furthermore, we need to get the overall consumer price inflation under control. We know that the Federal Reserve is constantly mentioning about tariff concerns, but I think the Federal Reserve should look at the shelter cost component of the consumer price inflation, which has been strongly decelerating. So with the decelerating trend, I think the Fed could be in a mood to say cut interest rate much sooner than anticipated. So they should look into those conditions, but we need to have lower mortgage rate to truly get the home buyers into the market. Now, home sales are sluggish, but let's remember, we have an all-time high in home prices. So homeowners are doing very, very well.

So do you think 6% is that sweet spot that would bring current home owners perhaps back to the table to list their own real estate and then for some potential buyers to feel like, okay, this is at least close enough to where where I should be comfortable entering the market.

Uh, it's more buyers. We are seeing more sell, uh, more inventory coming onto the market. The latest data actually shows five-year high in inventory. We are still below pre-COVID. We are still in a tight market condition, but inventory is beginning to show up because of life-changing events, people having new job at different places, marriages, divorces, additional child, retirement, all these factors leading people to say, look, I want to get into different house. So we are seeing more inventory, but not a pickup in home sales. To get a pickup in home sales, we need better affordability, and that is the magical power of lower mortgage rates.

We've also seen a slump in single family bills. What what does that hold for existing home buyers and sellers right now?

Uh, you know, the builders are back up to the pre-COVID sales activity. I think the builders were spooked somewhat because of the tariff issue or the cost of construction, uh, but the demand is clearly there. You know, the builders were able to do some incentives, such as mortgage rate buy down. So rather than doing a price cut, they were essentially using the money that could have done with a price cut, but did a mortgage rate buy down and therefore induced people to come into the market. So again, mortgage rate is critical, but since I'm in a wealth program with you, I also want to mention on the tax bill that is not being discussed, which is child savings account. It's not about a children saving money into the account, but it's about parents, grandparents, other people able to donate money into the child savings account, which later, when they grow up, they can use to buy a home. So we know that home ownership brings tremendous amount of wealth. So I'm really excited about that component of the tax bill.

All right. We'll see exactly how that holds up as it gets through and works its way through the Senate as well. Lawrence, thank you so much for taking the time. Good to see you.

Thank you.