Prospect for Future Home Demand is ‘Hopeful’

Fleming: “Small changes in potential homeownership demand hide the large amount of variation in markets across the country.”

SANTA ANA, CA—The outlook for homeownership demand belies the slight year-over-year decrease in that demand, First American Financial Corp. said Thursday. Due in part to Millennials putting off marriage longer than their parents’ generation did, for the moment potential homeownership demand is off 6% from the pre-recession peak, and is now “at the same level as it was in 1990, 27 years ago,” says Mark Fleming, chief economist with First American.

That being the case, Fleming points to the 0.4% Y-O-Y decrease in demand as measured by First American’s Home Ownership Progress Index between 2015 and 2016, and observes, “Even as Millennials continued to delay marriage and family formation and pursue higher education levels, the Homeownership Progress Index only declined moderately” on an annual basis. “Yet the prospect for future homeownership demand looks hopeful, as more households increase their educational attainment level and thus their prospect for higher income.”