First American: Home prices could be at tipping point
August 28, 2018 / Jeremiah Jensen
According to First American’s Chief Economist Mark Fleming, home prices are in the beginning stages of correcting to demand. As buyers pull back from the market and sellers adjust their price expectations, house prices will adjust, but the strong economic conditions and the shortage of supply relative to demand continue to support the housing market, Fleming said in a statement. We’re seeing the first indications that price appreciation may be slowing, but the underlying fundamental housing market conditions support a natural moderation of house prices rather than a sharp decline, he added. Fleming says the decline in home prices will be gradual because pent-up demand will cradle prices as they fall. Home price appreciation in this cycle has largely been a function of short supply and natural demand as opposed to the artificial demand created by the ease of mortgage financing that caused the boom before the crash.