Consumer buying power in the housing market increased by 1.3 percent from the previous month, but is down year-over-year by 2.1 percent.
First American Financial Corp's Chief Economist Mark Fleming stated that this "short-term boost for homebuyers is not expected to last, as supply constraints continue to drive unadjusted prices higher," reports National Mortgage News. Housing affordability has dropped 8 percent from last year, with price appreciation outpacing buying power.
"We have yet to see the impact of the Federal Open Market Committee decision to reduce the Federal Reserve's large portfolio of bonds, which will likely push mortgage rates higher in the coming months. This quantitative uneasing will further impact affordability," said Fleming.
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