Economic Center Blog

Busting The Myth Of The Millennial Renter Generation

By Mark Fleming on April 13, 2018

It’s a popular myth – the millennial generation is destined to be a generation of renters – avocado toast, anyone? With student loan debt burdens, the scars of the Great Recession, and limited housing supply, the myth is rooted in some real challenges for millennials. However, despite these challenges, millennials are not only interested in homeownership, they are the primary reason that the homeownership rate increased over the past year.

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Topics: Homeownership, millennials, Homeownership Progress Index, insider

Will Wage Growth Continue -- One Number May Tell The Story

By Mark Fleming on April 6, 2018

Today, the Bureau of Labor Statistics released the employment situation report for March. Here are the headlines. Total non-farm payroll jobs increased by 103,000 in March. Total non-farm payroll jobs have increased every month since October 2010. Since that date, the U.S. economy has added more than 17.5 million jobs. The unemployment rate remained again unchanged at 4.1 percent, a 17-year low, and average hourly earnings are up 2.4 percent over a year ago for production and non-supervisory employees. While the number of jobs created may seem disappointing, the data continues to paint a positive picture of the economy, but those are not the numbers that really matter.

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Topics: Housing, income, insider

Will Rising Mortgage Rates Hurt House Prices?

By Mark Fleming on March 26, 2018

As expected, the Federal Open Market Committee increased the Federal Funds rate last week, and signaled they expect to increase rates further later this year. It’s clear we have entered the rising interest rate environment that many have been predicting for years. With rising rates the new reality for the housing market, earlier this month we examined the possible impact of a dramatic increase in 30-year, fixed-rate mortgage rates on the market potential for sales. We found that even doubling the mortgage interest rate may only reduce the market potential for home sales by about 5 percent.

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Topics: Interest Rates, Potential Home Sales, Real House Price Index, insider, mortgage rates

How High Is Too High For Mortgage Rates?

By Mark Fleming on March 20, 2018

The Federal Open Market Committee (FOMC) meeting is just around the corner, and experts agree that an increase in the Federal Funds Rate is almost certain. In fact, the expectation of future Fed rate hikes is already putting upward pressure on mortgage rates. The benchmark 30-year, fixed-rate mortgage rate jumped three basis points to 4.4 percent this past week. Since the start of the year, the benchmark rate has climbed almost half a percentage point and has increased for eight consecutive weeks. Concern is growing about the impact of the rising mortgage rates on the housing market, but it is important to keep today’s mortgage-rate environment in perspective.

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Topics: Interest Rates, Homeownership, Potential Home Sales, insider, mortgage rates

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

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

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

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

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