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Low Supply Keeps Market below Potential, According to First American Potential Home Sales ModelFirst American Financial Corporation (NYSE: FAF), a leading global provider of title insurance, settlement services and risk solutions for real estate transactions, today released First American's proprietary Potential Home Sales model for the month of October 2017. October 2017 Potential Home Sales
Market Performance Gap
Chief Economist Analysis: Tight Inventory Continues to Put Pressure on Affordability "Tight supply and strong first-time home buyer demand continue to be the dominant factors driving the current state of the housing market. Existing homeowners remain reluctant to list their homes for sale for fear of not being able to find a home to buy, keeping supply levels low. At the same time, a healthy number of potential home buyers continue to enter the market, so house prices are increasing and affordability is declining," said Mark Fleming, chief economist at First American. "Historically low rates offer some relief in the form of strong borrowing power, however rates are expected to rise in the months to come, so if you are renting and thinking of buying, now is the time." Additional Quotes from Chief Eonomist Mark Fleming
What Insight Does the Potential Home Sales Model Reveal? "When considering the right time to buy or sell a home, an important factor in the decision should be the market's overall health, which is largely a function of supply and demand. Knowing how close the market is to a healthy level of activity can help consumers determine if it is a good time to buy or sell, and what might happen to the market in the future. That's difficult to assess when looking at the number of homes sold at a particular point in time without understanding the health of the market at that time," said Fleming. "Historical context is critically important. Our potential home sales model measures what home sales should be based on the economic, demographic, and housing market environments." Next Release The next Potential Home Sales model will be released on December 19, 2017 with November 2017 data. About the Potential Home Sales Model Background information on the First American Potential Home Sales model is available here. Disclaimer Opinions, estimates, forecasts and other views contained in this page are those of First American's Chief Economist, do not necessarily represent the views of First American or its management, should not be construed as indicating First American's business prospects or expected results, and are subject to change without notice. Although the First American Economics team attempts to provide reliable, useful information, it does not guarantee that the information is accurate, current or suitable for any particular purpose. © 2017 by First American. Information from this page may be used with proper attribution. About First American First American Financial Corporation (NYSE: FAF) is a leading provider of title insurance, settlement services and risk solutions for real estate transactions that traces its heritage back to 1889. First American also provides title plant management services; title and other real property records and images; valuation products and services; home warranty products; property and casualty insurance; and banking, trust and investment advisory services. With total revenue of $5.6 billion in 2016, the company offers its products and services directly and through its agents throughout the United States and abroad. In 2016 and again in 2017, First American was named to the Fortune 100 Best Companies to Work For® list. More information about the company can be found at www.firstam.com.
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