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Economic Center Blog

Will Quantitative Un-Easing Make Housing Unaffordable?

By Mark Fleming on September 20, 2017

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.

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Topics: Housing, Interest Rates, Federal Reserve, insider

How Will Hurricanes Harvey And Irma Impact Housing Market Potential?

By Mark Fleming on September 19, 2017

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.

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

The Fundamental Underlying Issue In The Housing Market

By FirstAm Editor on August 28, 2017

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.

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

The Struggle Is Real For First-Time Homebuyers

By Mark Fleming on August 23, 2017

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.

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

What Caused Real House Price Growth To Cool In May?

By FirstAm Editor on July 24, 2017

First American’s proprietary Real House Price Index (RHPI) looks at May 2017 data and includes analysis from First American Chief Economist Mark Fleming on the impact of wages and lower interest rates on consumer house-buying power – a brief reprieve from rising real house prices.

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Topics: Interest Rates, Real House Price Index, income

What Caused Real House Prices To Decline For The First Time In 8 Months?

By FirstAm Editor on June 26, 2017

First American’s proprietary Real House Price Index (RHPI) looks at April 2017 data and includes analysis from First American Chief Economist Mark Fleming on the impact of wages and lower interest rates on real house prices.

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Topics: Interest Rates, Real House Price Index, income

Here’s Why A Fed Rate Increase Does Not Matter To The Housing Market

By Mark Fleming on June 13, 2017

With the Federal Reserve Open Market Committee (FOMC) meeting to decide whether to increase the Federal Funds rate in just a few days, the potential for an increase in mortgage rates dominates the housing news and industry chatter. Yet, changes to the short-term rate matter little to the housing market.

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Topics: Interest Rates, Federal Reserve, insider

Supply Squeeze Sends Real House Prices Higher

By FirstAm Editor on May 25, 2017

First American’s proprietary Real House Price Index (RHPI) looks at March 2017 data and includes analysis from First American Chief Economist Mark Fleming on the continuing supply squeeze and its effect on real house prices.

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Topics: Interest Rates, Real House Price Index, income

Market Potential Caught In The Crosswinds Of Surging Demand And Tightening Inventory

By Mark Fleming on May 23, 2017

First American’s proprietary Potential Home Sales model looks at April 2017 data and includes analysis from First American Chief Economist Mark Fleming on how the real estate market is performing versus its potential.

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Topics: Interest Rates, Existing Home Sales, Potential Home Sales

What’s Behind The Surge In Real House Prices?

By FirstAm Editor on April 24, 2017

First American’s proprietary Real House Price Index (RHPI) looks at February 2017 data and includes analysis from First American Chief Economist Mark Fleming on the impact of under-supplied markets on real house prices.

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Topics: Interest Rates, Real House Price Index, income