Housing Market’s Potential Grows Stronger

Fleming: “Strong consumer demand combined with continued healthy wage growth” continues to support the housing market.

SANTA ANA, CA—Although the market for existing-home sales is still underperforming its potential, it has made considerable gains on both a year-over-year and post-recession basis, according to data First American Financial Corp. released Wednesday. Potential existing-home sales decreased in March to a 5.5-million seasonally adjusted, annualized rate, a decline of 1.5% compared to February but an increase of 83.3% over the market potential low point reached in December 2008.

The market for existing-home sales is underperforming its potential by 2.3% or an estimated 129,000 SAAR sales, according to First American. Yet that’s a 47% improvement compared to the year-ago period, when the the housing market for existing-home sales was underperforming its potential by an SAAR of 275,000 sales.