First American: Housing Market Slowing by Design
Summary
The housing market is “normalizing” as affordability rapidly declines, forcing both buyers and sellers to adjust their expectations, according to a new report. “Even though household income increased 4.9% since March 2021 and boosted consumer house-buying power, it was not enough to offset the affordability loss from higher mortgage rates and fast-rising nominal prices.” Fleming noted that reduced affordability prompts some buyers to pull back from the market and sellers to adjust their price expectations. “The housing market is slowing down by design, as the Federal Reserve tightens monetary policy in order to tame inflation,” Fleming said. In the most recent rising mortgage rate era from 2017-18, nominal house prices increased approximately 7% over a 15-week period.” What effect does the low supply-high demand imbalance have on the market? • Among the Core Based Statistical Areas (CBSAs) tracked by First American, the five markets with the greatest year-over-year increase in the RHPI are: Charlotte, N.C. (+46.6%), Raleigh, N.C. (+43.5%), Tampa, Fla. (+43.3%), Phoenix (+42%), and Jacksonville, Fla. (+41.2%).
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