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. Read More

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. Read More

Housing Interest Rates Federal Reserve Affordability

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 ... Read More

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 ... Read More

Housing Affordability

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. Read More

Interest Rates 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 ... Read More

Housing Interest Rates Federal Reserve Affordability