First American’s proprietary Real House Price Index (RHPI) looks at July 2017 data and includes analysis from First American Chief Economist Mark Fleming on the supply constraints impacting the housing market.
This month, the Federal Open Market Committee (FOMC) will consider again whether to increase the benchmark Federal Funds Rate for a third time this year. As I stated when the FOMC was contemplating a rate increase earlier this year, increasing the short-term Federal Funds rate has little impact on longer term rates like the 30-year, fixed-rate mortgage. But, more importantly, the FOMC may start reducing its $4.5 trillion portfolio of bonds purchased during the global financial crisis through various rounds of quantitative easing (QE). Almost 40 percent of that portfolio is mortgage backed securities (MBS) that the Fed started buying in 2009. As explained by the FOMC in June, the “Quantitative Un-Easing” plan, could begin at any point this year with the reduction of $4 billion a month in MBS. The pace of MBS sales would increase by $4 billion each quarter up to a maximum of $20 billion per month.
First American’s proprietary Potential Home Sales model examines August 2017 data and includes analysis from First American Chief Economist Mark Fleming on how the real estate market is performing versus its potential.
We’ve said it before and we’ll say it again – the shortage of houses on the market is making it difficult for Americans to find homes to buy, which is especially concerning for the Millennial first-time home buyer. There are many possible reasons for the housing supply shortage, ranging from fear of paying a higher mortgage rate to insufficient equity keeping sellers at bay. Frequent readers of this blog will be familiar with our “prisoner’s dilemma” theory for the housing supply shortage.
We invite you to browse the third quarter 2017 First American Real Estate Sentiment Index, which is based on a quarterly survey of independent title agents and other real estate professionals, providing a unique gauge on the real estate market using the crowd-sourced wisdom and expertise of real estate experts.
As Hurricane Harvey’s flood waters finally recede, the degree of damage is becoming more apparent. The most recent estimates indicate that flood damage could be assessed as high as $37 billion and that 70 percent of that damage is to property that is uninsured. According to the Federal Emergency Management Agency (FEMA), more than 30 counties and more than 100,000 properties have been impacted in some way. Harris County alone accounts for 68 percent of the affected or damaged properties. FEMA estimates that more than 12,000 properties in Harris County have major damage or are destroyed. When the flood waters are finally gone and all the costs are accounted for, Harvey is likely to be the costliest hurricane in U.S. history.
We’ve posted the July First American Loan Application Defect Index, which estimates the frequency of defects, fraudulence and misrepresentation in the information submitted in mortgage loan applications. The Defect Index remained the same in July 2017 as compared with the previous month, and increased 20.0 percent as compared to July 2016. The Defect Index is down 17.6 percent from the high point of risk in October 2013.
Topics: Loan Application Defect Index
First American’s proprietary Real House Price Index (RHPI) looks at June 2017 data and includes analysis from First American Chief Economist Mark Fleming on the prevailing issue facing today’s housing market.
First American’s proprietary Potential Home Sales model examines July 2017 data and includes analysis from First American Chief Economist Mark Fleming on how the real estate market is performing versus its potential.
We’ve posted the annual First American Homeownership Progress Index (HPRI), which measures how a variety of lifestyle, societal and economic factors influence homeownership rates over time at national, state and market levels. The HPRI declined 0.4 percent year-over-year, and is down 6 percent from the pre-recession peak. Potential homeownership demand is at the same level it was in 1990.