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The existing home sales market surpassed its potential by 5.1% every month. First American Financial’s latest Potential Home Sales Index, showed that potential existing-home sales jumped to a 6.41 million seasonally adjusted annualized rate (SAAR).
The market performance gap in July was also narrower compared to June by around 21,160 SAAR sales.
According to First American’s Potential Home Sales Model, their housing market potential strengthened in July by 1.3% from the previous month said their chief economist Mark Fleming. Compared to July 2020, it is now nearly 16% higher.
Fleming said that the increase in housing market potential is because of low mortgage rates and the growth in household income resulting in higher house-buying power, compared to July it has increased 1.9%.
The housing shortage on market was when people were skeptical of leaving their home led to a reduction of 9,100 potential home sales compared with one month ago.
This fear got imbedded by the housing market crash a decade ago where the average length of time people stay in their homes increased, leading to fewer and fewer people listing their homes for sale, resulting in a tight housing supply.
Despite the uptick in supply, Fleming believes that the demand is still not being met due to the lack of supply
Reference Source: MPA
