“Changes to house prices in part reflect the relationship between supply and demand. As housing supply increases relative to demand, price appreciation slows down,” said Fleming. “In the current state of the market, rising prices and increasing mortgage rates have reduced affordability, discouraging some first-time home buyers from entering the market. Additionally, rising mortgage rates have reduced the propensity of existing homeowners to sell, which also prevents them from becoming buyers. Survey respondents expect that reduced demand will slow house price appreciation.”

Fourth Quarter 2018 Real Estate Sentiment Index

  • Overall, confidence in purchase residential volume growth over the next 12 months decreased 36.9 percent compared with a year ago.
  • Confidence in refinance transaction volume growth over the next 12 months decreased 41.2 percent compared with a year ago.
  • Residential property prices are expected to increase by 2.2 percent over the next 12 months.
  • Residential price expectations are 1.2 percent lower than they were in Q4 2017.

What Do the RESI Number Values Mean?

Title insurance agents and real estate professionals are experts in their local real estate markets and have valuable insight. First American’s proprietary Real Estate Sentiment Index is based on a bi-annual survey of independent title agents and other real estate professionals, providing a unique gauge on the real estate market using the crowd-sourced wisdom and expertise of real estate experts.

Next Release

The next release of the First American Real Estate Sentiment Index will be posted in June 2019.

Methodology

The methodology statement for the First American Real Estate Sentiment Index is available at http://www.firstam.com/economics/real-estate-sentiment-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. © 2018 by First American. Information from this page may be used with proper attribution.