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Affordability Surprises in September as Rates Dip and Wages Rise, According to First American Real House Price IndexFirst American Financial Corporation (NYSE: FAF), a leading global provider of title insurance, settlement services and risk solutions for real estate transactions, today released the September 2017 First American Real House Price Index (RHPI). The RHPI measures the price changes of single-family properties throughout the U.S. adjusted for the impact of income and interest rate changes on consumer house-buying power over time at national, state and metropolitan area levels. Because the RHPI adjusts for house-buying power, it also serves as a measure of housing affordability. September 2017 Real House Price Index
Chief Economist Analysis: Limited Inventory and Rising Rates Likely to Impact Affordability "Consumer house-buying power improved in September due to a combination of slightly lower rates and rising wages compared with August. However, over the past 12 months, affordability has declined by 8 percent as nominal prices have increased faster than buying power. Demand continues to outpace supply as existing homeowners remain reluctant to list their homes for sale for fear of not being able to find a home to buy, while home buyers, enticed by low mortgage rates, continue to enter the market," said Mark Fleming, chief economist at First American. "Mortgage rates are expected to increase next year as the Federal Reserve slowly begins to unwind its portfolio of bonds. Persistent supply constraints will also remain a challenge for those seeking to achieve homeownership. Nonetheless, while lower than a year ago, affordability remains high by historic standards. Only four states and the District of Columbia are less affordable today than they were in January 2000," said Fleming. Additional Quotes from Chief Economist Mark Fleming
September 2017 Real House Price Local Market Highlights
Next Release The next release of the First American Real House Price Index will take place the week of December 21, 2017 for October 2017 data. Methodology The methodology statement for the First American Real House Price Index is available at http://www.firstam.com/economics/real-house-price-index. Disclaimer Opinions, estimates, forecasts and other views contained in this page are those of First American's Chief Economist, do not necessarily represent the views of First American or its management, should not be construed as indicating First American's business prospects or expected results, and are subject to change without notice. Although the First American Economics team attempts to provide reliable, useful information, it does not guarantee that the information is accurate, current or suitable for any particular purpose. © 2017 by First American. Information from this page may be used with proper attribution. About First American First American Financial Corporation (NYSE: FAF) is a leading provider of title insurance, settlement services and risk solutions for real estate transactions that traces its heritage back to 1889. First American also provides title plant management services; title and other real property records and images; valuation products and services; home warranty products; property and casualty insurance; and banking, trust and investment advisory services. With total revenue of $5.6 billion in 2016, the company offers its products and services directly and through its agents throughout the United States and abroad. In 2016 and again in 2017, First American was named to the Fortune 100 Best Companies to Work For® list. More information about the company can be found at www.firstam.com.
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