Economic Center Blog

Mind The Gap…Between Household Formation And Home Building

By Mark Fleming on June 20, 2018

Closing the Housing Stock Gap

Today’s Census Bureau report sends an optimistic message about the housing market. Building permits increased 8.0 percent since this time last year, while housing starts rose 20.3 percent. The year-over-year increase in housing starts tells us that an increase in new housing supply is on the way. The pace of housing completions, at a 1.29 million seasonally adjusted annualized rate (SAAR), is particularly important as it brings new supply that can offset current housing shortages.

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Topics: Housing, Homeownership, housing starts, insider

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, Homeownership, Potential Home Sales, Federal Reserve, insider, mortgage rates

Will First-Time Home Buyer Demand Withstand Rising Rates?

By Mark Fleming on June 12, 2018

Given the strong likelihood of rising mortgage rates in 2018, many savvy real estate market observers are curious how rising rates may impact demand, especially among millennial first-time home buyers. As part of our quarterly First American Real Estate Sentiment Index (RESI), we recently surveyed title insurance agents and real estate professionals across the nation for their perspective on how sensitive they thought first-time home buyers were to rising mortgage rates and at what rate they would withdraw from the market.

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Topics: Housing, millennials, Real Estate Sentiment Index, insider

Quoted On Forbes.com: Rising Rates Can Increase Housing Demand

By FirstAm Editor on June 7, 2018

First American Chief Economist Mark Fleming was quoted Tuesday in a feature article on Forbes.com, explaining how rising rates can increase housing demand.

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Topics: Housing, In The News, Interest Rates, millennials, affordability, home buying

What Does The Prime-Age Labor Force Participation Rate Mean To Your Paycheck?

By Mark Fleming on June 2, 2018

The Bureau of Labor Statistics’ employment situation report for May signals good news for the housing market, as the unemployment rate hits an 18-year low, and hourly wages continue to increase.

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Topics: income, employment situation, jobs report

Why The Ability-to-Repay Rules Are Like A Steering Wheel Lock

By Mark Fleming on May 30, 2018

In January of 2013, the mortgage industry witnessed the birth of a new income-underwriting era. The Consumer Finance Protection Bureau (CFPB) published new requirements for mortgage lenders to carefully assess a consumer’s ability to repay their mortgage loan. The new standards were dubbed the “ability-to-repay” rules and were set to take effect one year later in January 2014. 

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Topics: Fraud, Loan Application Defect Index, income

Unadjusted House Prices Are Higher Than Ever, But What Is The Real Story?

By Mark Fleming on May 24, 2018

As the home-buying season continues, the inventory of homes for sale remains historically low, while demand is increasing. Not surprisingly, house prices continue to rise. In March, unadjusted house prices increased by 6.4 percent compared with a year ago and they are now 8.7 percent above the housing boom peak for unadjusted house prices reached in 2007. But, does that tell the real story?

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Topics: Real House Price Index, affordability, insider

The Surprising Impact Of Rising Rates On Market Potential

By Mark Fleming on May 23, 2018

In April, the housing market continued to underperform its potential. Existing-home sales were 6.5 percent below the market’s potential for existing-home sales, according to our Potential Home Sales Model. Lack of supply remains the primary culprit. The inventory of homes for sale in most markets remains historically low, yet demand continues to rise as millennials further age into homeownership.

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

Interview On CNBC: Explaining The Link Between Rising Rates, Housing Supply And Affordability

By FirstAm Editor on May 18, 2018

First American Chief Economist Mark Fleming was interviewed yesterday on CNBC and explained the link between rising rates, housing supply and affordability.

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Topics: Housing, In The News, Interest Rates, millennials, affordability

What Does California's Solar Panel Mandate Mean For Affordability, And April Housing Starts Data Signal Optimism

By Mark Fleming on May 17, 2018

California moved to the center of the new residential construction solar system last week as it became the first state to mandate solar panels on new residential homes. The mandate is part of California’s “Energy Efficiency Strategic Plan,” which includes the goal that both residential and commercial construction be zero net energy by 2030. The jury is split as to whether the benefits of the new requirement will outweigh the costs. On one hand, the mandate will significantly expand mainstream use of solar power. However, it will add thousands of dollars to the cost building a new of home when the shortage of affordable housing is a significant concern in California. Clean energy advocates claim lower energy bills will more than offset the extra cost. We put this notion to the test.

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Topics: Housing, Homeownership, affordability, housing starts, insider