First American's Mark Fleming on the housing market's unmatched potential

Today’s Daily Download episode features an interview with Mark Fleming, the chief economist at First American. In this episode, Fleming speaks with HousingWire about First American’s Potential Home Sales Model, which indicates the housing market potential reached a 13-year high during the month of August. 

During the interview, Fleming explains how the housing market was able to retain its strength despite COVID-19’s impact on both the mortgage and real estate industries. 

“When the housing industry went into the coronavirus pandemic back in March, the market sort of took a pause and home sales declined,” Fleming said. “During this time, I think we all thought we were going to have to deal with a significant fallout, but we quickly realized in late April and early May that the housing market found a way around it so pleasantly.”

“While this was not expected, it’s clear that the housing industry was the only ‘V-shaped’ recovery amongst all of the sectors in the economy today,” he said. “Home sales are going better than they have before, we're hitting high points for sales in August and that strength is expected to continue into the rest of the year.”

Fleming also discusses whether or not growth in potential home sales is sustainable for the foreseeable future. 

“I think it's sustainable and may not grow as quickly as it has in recent months, which have sort of been a recovery phase from the Spring, Fleming said. “But there are some long-run fundamental dynamics that are very positive for the growth of the housing market.”

“The largest one namely being Millennial first-time homebuyer demand, there are just millions upon millions of households that are just getting to the point of their early 30s and wanting to buy homes,” he said. “So, we will benefit for a number of years to come from that demographic demand, and as Jerome Powell has strongly indicated, mortgage rates will probably remain at historically low levels. Those two dynamics alone should help to push forward the housing market for the next couple of years.”

The Daily Download examines the most compelling articles reported by the HousingWire newsroom team. Each afternoon, we provide our listeners with a deeper look into the stories coming across our newsroom that are helping Move Markets Forward. Hosted by the HW team and produced by Alcynna Lloyd and Victoria Wickham.