First American Financial Corporation's Potential Home Sales Model for August 2021 reported a 9.9% year-over-year increase in market potential for existing home sales. First American's report found that potential existing-home sales increased to 6.40 million, a 0.05% month-over-month increase. Currently, potential existing-home sales are 392,200 at a seasonally adjusted annualized rate, or 5.8% below the pre-recession peak of market potential, which occurred in April 2006. With the economy facing such uncertainty given the recent increase in COVID-19 cases across the U.S., it's hard to imagine that potential existing-home sales and market potential would increase. However, First American revealed that the market for existing-home sales outperformed its potential by 6.4%, that's not all, housing market potential is up 9.9% year-over-year. “Housing market potential continued to strengthen in August, according to our Potential Home Sales Model, increasing 0.05 percent compared with July,” said Mark Fleming, chief economist at First American. “The market potential for existing-home sales is now nearly 10% higher than in August of 2020, when the housing market’s summer rebound was ramping up following the initial pandemic-driven decline in the spring.
Source: National Mortgage Professional