First American Financial Corporation chief economist Mark Fleming discussed whether home prices could decrease amid expected rate hikes from the Federal Reserve as a way to tame surging inflation.
Last month, the Labor Department said that the consumer price index – which measures a bevy of goods including gasoline, health care, groceries and rents – rose 8.5% in March from a year ago, the fastest pace since December 1981, when inflation hit 8.9%. Prices jumped 1.2% in the one-month period from February, the largest month-to-month jump since 2005.from Freddie Mac, with the 30-year fixedrate mortgage falling to 5.1% as of April 28.
First American Financial Corporation chief economist Mark Fleming discusses mortgage rates and home prices. for the week ending April 28, which is down from 5.11% the week before and up from 2.98% last year. Fleming acknowledged that 5% has been a "big move" and noted that the number "should curtail demand and affordability in the housing market."He added that, from a historical perspective, "5% is still a pretty good mortgage rate."
"And because there’s such a short supply of housing out there, even with the reduced demand due to the higher rates, it’s still imbalanced, so prices are not expected to decline," Fleming said, noting that perhaps prices could "soften in terms of their pace of appreciation."
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