NAR met with the U.S. Treasury to propose that the federal government establish an interest rate buydown program to lower mortgage costs to the consumer and encourage home sales. A simple 1% drop in mortgage rates can increase home sales which could lead to a turnaround in homeownership demand. In addition, for every 1% buydown in interest rates, we would see close to a half million additional home sales over a one year period according to an internal projection. This would shrink home sale inventory from a 10 month to a 7.5 month supply. Economists consider a supply of 5.5 - 7 months to be a balanced market.   

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Data source: Lawrence Yun, NAR