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Economic Center Blog

Will The Tax Code Changes Influence House Prices Or Market Supply And Demand?

By Mark Fleming on March 13, 2018

The impact of the new tax code on the housing market has been heavily studied and debated in academic, policy and political circles, with most agreeing that the changes remove any significant tax differences between homeowners and renters for the majority of U.S. households. But, what do the people handling real estate transactions every day think?

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Topics: Real Estate Sentiment Index, affordability, insider

What Does Faster Inflation And Rising Mortgage Rates Mean For Housing?

By Mark Fleming on March 9, 2018

As the March Federal Reserve (Fed) meeting approaches, overall positive economic conditions are troubling those who follow the Fed closely. Many might pose the question, why would positive economic conditions be troubling?

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Topics: Interest Rates, Federal Reserve, affordability, insider, mortgage rates

How Wage Growth Both Helps And Hurts Housing Affordability

By Mark Fleming on February 26, 2018

Earlier this month, the Bureau of Labor Statistics reported that average hourly earnings increased in January by 2.9 percent compared with a year ago. This was a big splash of economic news that had ripple effects on the housing market, as the 2.9 percent increase in wages surpassed expectations.

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Topics: Real House Price Index, affordability

Where Is House-buying Power The Strongest?

By Mark Fleming on February 14, 2018

Whether you plan to buy a modest studio or a four-bedroom penthouse, how much you can afford to borrow primarily rests on two main factors: income and interest rates. Income growth seems to be increasing, thus increasing affordability. However, the near certainty of future rate hikes will likely be a drag on affordability.

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Topics: Interest Rates, Federal Reserve, affordability, insider, mortgage rates

The Affordability Crisis That Isn't

By Mark Fleming on January 29, 2018

That nominal house prices are growing faster than household incomes is often used as the basis for arguing that we are facing an affordability crisis. It is true that unadjusted house prices grew faster than income between November 2016 and November 2017. Our Real House Price Index (RHPI) showed that unadjusted house prices increased by 6.0 percent in November on a year-over-year basis and are 6.3 percent above the housing boom peak in 2007. Over the same 12-month period, household incomes have increased by significantly less, 2.8 percent.

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Topics: Real House Price Index, affordability

Two Reasons Why The Housing Reservoir Is Running Dangerously Low

By Mark Fleming on January 26, 2018

It’s been just over five years since house prices reached their trough and the housing market bottomed out. In the years following that low point, there has been a lot of discussion about how to increase demand and, specifically, why young adults today didn’t want to buy homes. I believed that the lack of desire among millennials was not a generational shift of interest away from homeownership toward perennial renting, but a matter of timing and lifestyle choices. The desire to become a homeowner simply emerged later in life than with prior generations.

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Topics: affordability, insider, mortgage rates

The Drag On Affordability Explained

By FirstAm Editor on December 21, 2017

First American’s proprietary Real House Price Index (RHPI) looks at October 2017 data and includes analysis from First American Chief Economist Mark Fleming on the market forces that are keeping a lid on affordability.

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Topics: Interest Rates, Homeownership, Real House Price Index, income, affordability

Best Cities To Maximize Borrowing Power For First-Time Home Buyers

By Mark Fleming on December 11, 2017

It’s a near certainty that the Federal Open Market Committee (FOMC) will raise the short-term Federal Funds rate this week. The CME group estimates the probability of a 25 basis-point increase at 90.2 percent. Some may fret about how this will impact the housing market, but they are missing the point on mortgage rates and affordability for first-time home buyers.

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Topics: Interest Rates, Federal Reserve, affordability, insider, mortgage rates

What’s Behind September’s Surprise Increase In Affordability?

By FirstAm Editor on November 27, 2017

First American’s proprietary Real House Price Index (RHPI) looks at September 2017 data and includes analysis from First American Chief Economist Mark Fleming on the market forces that sparked a surprising increase in affordability in September.

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Topics: Interest Rates, Homeownership, Real House Price Index, income, affordability

Five Best Cities For Economic Opportunity

By Mark Fleming on November 16, 2017

Amazon’s very public search to identify the best location for its second headquarters made me wonder - what criteria would be helpful for young professionals when making their personal decision on where to live and work? Affordable housing would be important. For example, you can buy so much more home in Texas or Ohio than you can in California. But, when making the decision about where to live, considering what and how many job opportunities exist is also a critical point. The most attractive places to live for young professionals would be where housing costs are reasonable and great job opportunities are abundant. In other words, the top cities for economic opportunity.

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Topics: Real House Price Index, affordability, insider