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Economic Center Blog

Why ARMs Today Are Different

By Odeta Kushi on October 10, 2018

Adjustable-rate mortgages (ARMs), a symbol of the housing market crash, are making a comeback, but their resurgence is not an indicator of a potential negative turn in the housing market. An ARM is a mortgage that typically has a 30-year repayment term, but the interest rate is fixed for the first few years of the loan. Once the fixed period ends, the interest rate adjusts based on market changes. 

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Topics: Affordability, Interest Rates, Insider, Real House Price Index

Interview On CNBC: Discussing The Impact Of Rising Rates On Affordability And Home-buying Demand

By FirstAm Editor on October 5, 2018

First American Chief Economist Mark Fleming was interviewed on CNBC yesterday and discussed the impact of rising interest rates on affordability and home-buying demand.

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Topics: Housing, In The News, Interest Rates, Millennials, Affordability

How Will Rising Mortgage Rates Impact Housing Affordability In 2019?

By Mark Fleming on September 24, 2018

The Federal Open Market Committee (FOMC) meeting is just around the corner and a rate hike is almost certain, according to experts, which will trigger conversations about rising mortgage rates across the housing industry. While changes to the federal funds rate won’t necessarily spur further increases in mortgage rates, mortgage rates are expected to rise nonetheless.

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Topics: Real House Price Index, Affordability, Interest Rates, Insider

Interview On CNBC: Discussing The Housing Market’s Potential Shift Toward A Buyer’s Market

By FirstAm Editor on September 21, 2018

First American Chief Economist Mark Fleming was interviewed on CNBC earlier this week and discussed the housing market’s potential shift toward a buyer’s market and the challenges facing the market: affordability and interest rates.

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Topics: Housing, In The News, Interest Rates, Millennials, Affordability

Does Rising Housing Inventory Signal The Beginning Of A Buyer’s Market?

By Mark Fleming on September 17, 2018

Last month, we noted in our latest Real House Price Index (RHPI) report that house price appreciation may be slowing. According to our RHPI, 21 cities experienced a monthly decline in their real, consumer house-buying power-adjusted price level. One reason for the price appreciation slowdown is that 21 of the 50 largest cities in the U.S. experienced an increase in the number of houses on the market in July compared with a year ago, according to realtor.com data.

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Topics: Affordability, Real House Price Index, Mortgages, Insider, Interest Rates

Interviews On CNBC: Discussing Rising Mortgage Rates, House Price Appreciation, Millennial Demand And Lack Of New Home Construction

By FirstAm Editor on August 24, 2018

First American Chief Economist Mark Fleming was interviewed on CNBC earlier today as well as last Friday, August 17 and discussed how rising mortgage rates, house price appreciation, millennial demand and a lack of new homes may be squeezing affordability.

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Topics: housing starts, In The News, Interest Rates, Millennials, New Home Buying, Affordability

Why Hasn’t Economic Momentum Lifted Home Sales?

By Mark Fleming on August 21, 2018

The U.S. economy remains on an impressive growth streak. Last month, the Commerce Department reported that the gross domestic product, the broadest measure of goods and services produced in the economy, grew at a 4.1 percent annualized rate in the second quarter, the strongest pace of growth since 2014. The economy has added jobs every month for 94 consecutive months, producing the lowest unemployment rate since 2000.

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Topics: homeownership, Interest Rates, Insider, Housing

Interview On CNBC: Explaining The Shortage Of Supply In The Housing Market And Demographic Wave Of Demand

By FirstAm Editor on August 1, 2018

First American Chief Economist Mark Fleming was interviewed yesterday on CNBC and discussed housing supply and demand, affordability and challenges facing new home builders.

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Topics: Housing, Affordability, In The News, Interest Rates, Millennials

Good Timing: Loan Application Defect And Fraud Risk Drops As Home Purchases Take Higher Share Of Mortgage Market

By Mark Fleming on June 28, 2018

By now, everyone in the mortgage industry is aware that we are entering a market that will be dominated by purchase demand for the next several years. According to the latest Mortgage Bankers Association forecast, refinance transactions will make up 28 percent of total mortgages originated in 2018 and is forecasted to drop to 23 percent by 2020. This is, of course, due to the current environment of increasing mortgage rates that follows years of persistently low rates. Until last month, the average rate for a 30-year fixed mortgage had remained below 4.5 percent for 80 consecutive months. And since most homeowners have benefited from the low-rate environment, they now have little financial incentive to refinance, or sell and buy again. With mortgage rates continuing to rise, the financial value of keeping their current low-rate mortgages is likely to increase.

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Topics: Loan Application Defect Index, Fraud, Interest Rates

What's The Outlook For Housing Market Potential Amid Rising Mortgage Rates?

By Mark Fleming on June 18, 2018

With the Federal Reserve Open Market Committee (FOMC) decision to increase the Federal Funds Rate last week, the prospect of higher mortgage rates remains top of mind among real estate professionals and continues to generate headlines. Yet, changes to the short-term rate matter little to the housing market.

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Topics: Interest Rates, Federal Reserve, Insider, Housing