FAFC: House Price Appreciation May Not Increase Market Potential
Summary
But this relationship is not so straightforward.” House price appreciation is continuing to be fueled by a strong demand for homes, paired with a low supply. On the opposite side of the spectrum, a decline in house-buying power and a number of other factors held market potential down in Sept. “Does it make sense that rising house prices can help spur more home sales? Simply put by Fleming, “...even if the owner has the purchasing power, it’s hard to buy what’s not for sale.” Inventory has grown over the past couple of months, however, it still remains near historic lows, according to the report. Though, with rates expected to increase with economic growth, the window for existing homeowners isnt exactly going to stay open much longer. “While existing homeowners are sitting on record levels of equity, many of these owners have also secured historically low fixed mortgage rates.