RSS From Economist Mark Flemming

  • Why the Time May Be Right for New Home Construction to Accelerate November 8, 2019
    Thus far in 2019, the story of the housing market has been a tale of strong housing demand and limited supply. On the demand side, steadily rising house-buying power has fueled greater demand. Falling mortgage rates and rising household income sparked a nearly 12.6 percent increase in house-buying power year to date through September. The […]
    Odeta Kushi
  • Why Has Defect Risk Reached a Multi-Year Low Point? October 31, 2019
    Declining for the sixth consecutive month, the Loan Application Defect Index for purchase transactions fell 2.6 percent in September compared with August. The Defect Index for refinance transactions also fell, declining 4.5 percent compared with the previous month. The overall Defect Index, which includes both purchase and refinance transactions, fell 5.5 percent compared with last […]
    Mark Fleming
  • The Dynamic Forces that Re-Shaped Housing Affordability in 2019 October 28, 2019
    Understanding the dynamics that influence consumer house-buying power, how much home one can buy based on changes in income and interest rates, provides a helpful perspective on the housing market. When incomes rise, consumer house-buying power increases. When mortgage rates or nominal house prices rise, consumer house-buying power declines. Our Real House Price Index (RHPI) […]
    Mark Fleming
  • What’s the Outlook for Housing Market Potential for the Rest of 2019? October 18, 2019
    In September 2019, the housing market performed to its potential, as actual existing-home sales were a marginal 0.04 percent, or an estimated 2,340 seasonally adjusted annualized sales, below market potential. Housing market potential decreased relative to last month, but increased 3.8 percent compared with September of last year. Indeed, in September of last year, rising […]
    Mark Fleming
  • Why Our Economy Is Generating More Investment Growth in IP than IT October 16, 2019
    Important, but easy to overlook shifts in investment trends may be contributing to our current era of low interest rates. An excess supply of global savings relative to the demand for that money for investments is driving down interest rates, which can be thought of as the price of money. The neutral rate of interest, […]
    Odeta Kushi
  • How 2019 Became the Year of Declining Fraud Risk September 26, 2019
    Declining for the fifth consecutive month, the Loan Application Defect Index for purchase transactions continued its downward trend, falling 3.8 percent in August compared with July. The Defect Index for refinance transactions also fell, declining 4.3 percent compared with the previous month. The overall Defect Index, which includes both purchase and refinance transactions, fell 3.9 […]
    Mark Fleming
  • Interview on Nightly Business Report: Discussing Surge in Potential Housing Supply September 24, 2019
    First American Deputy Chief Economist Odeta Kushi was interviewed on Nightly Business Report last week and discussed the dramatic jump in housing starts to a 12-year high, signaling the potential for some housing supply relief in the near future.
  • How Did Affordability Change During the Spring Home-Buying Season? September 23, 2019
    School bells ringing don’t just mark the beginning of a new school year, but for those in housing, they also signal the end of the typical home-buying season, which begins in March. As the school year begins, the housing market is finishing the spring home-buying season with strong marks for affordability. Indeed, two of the […]
    Mark Fleming
  • How Can Existing-Home Sales Exceed Market Potential? September 18, 2019
    The housing market exceeded its potential in August 2019, as actual existing-home sales were 0.8 percent above the market’s potential. Housing market potential increased relative to last month, but declined 1.9 percent compared with August of last year. While down compared with a year ago, existing-home sales have slightly outperformed market potential since February 2019, […]
    Mark Fleming
  • What is the Neutral Rate of Interest and How Does it Influence the Federal Reserve? September 17, 2019
    Many people understand the “natural rate of unemployment,” and if you don’t, you can probably guess what it is – the rate of unemployment when the labor market reaches equilibrium. What many people don’t know is that a similar concept exists in monetary policy.
    Mark Fleming