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SANTA ANA, CA—Rising home prices are not the primary dynamic preventing existing homeowners from listing their homes for sale, First American Financial Corp.'s chief economist Mark Fleming tells GlobeSt.com. Fleming says, according to the firm's latest Real Estate Sentiment Index (RESI), “one critical reason for the supply constraint is that existing homeowners are unwilling to list their homes for sale for fear of not being able to find something to buy.”
He adds that rising interest rates and rapid price appreciation driven by the lack of supply caused affordability to decline in July. “Based on our RHPI, affordability has declined by more than 10% over the last year. But, the loss in affordability is only significant to potential first-time buyers. Existing homeowners with fixed-rate mortgages benefited from the rising prices with increased equity. Your perspective on rising home prices and affordability largely depends on whether you are a homeowner or not.”
We spoke with Fleming about current homeowners' view of the housing market and the factors that are currently preventing them from listing their homes.
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Carrie Rossenfeld
Carrie Rossenfeld is a reporter for the San Diego and Orange County markets on GlobeSt.com and a contributor to Real Estate Forum. She was a trade-magazine and newsletter editor in New York City before moving to Southern California to become a freelance writer and editor for magazines, books and websites. Rossenfeld has written extensively on topics including commercial real estate, running a medical practice, intellectual-property licensing and giftware. She has edited books about profiting from real estate and has ghostwritten a book about starting a home-based business.
