Resi Market Faces ‘Prisoner’s Dilemma’

“As the seller’s market continues to strengthen, affordability is expected to decline further,” says Fleming.

SANTA ANA, CA—Whether the metric is existing or new single-family homes, April saw lower numbers compared to March. First American Financial Corp. said Tuesday that its Potential Home Sales model for the month declined 0.2% from March’s revised data, while federal numbers on new-home sales for April represented an 11.4% drop from the previous month.

That being said, First American Financial notes that while the existing-home market is still underperforming its potential, underperformance has improved by 84.1% from the year-ago period. “Demand for existing-homes remains strong, as positive economic conditions and the demographic tailwind of Millennial demand continues to grow,” says Mark Fleming, chief economist at First American.