Low mortgage rates drove the nation's housing market potential to a two-year high in January, according to First American. Mark Fleming, the company's chief economist, said the market potential for existing-home sales climbed to the highest level since January 2018.

"Housing market potential increased 1.4% in January 2020 relative to the previous month, and grew 4.7% year over year, an increase of 240,050 potential existing-home sales and the highest rate of yearly growth since December 2017," Fleming said. "Actual existing-home sales exceeded housing market potential by 1%, or an estimated 53,900 seasonally adjusted annualized sales."

Fleming primarily attributes this growth to low financing costs and rising demand fueled by Millennial homeownership. "In 2020, 4.8 million Millennials will turn 30 - the peak age for home-buying. They're fortunate to be entering the housing market at a time of historically low mortgage rates and a strong economy," Fleming said. "However, there are challenges. Millennials face a very limited supply of existing homes available for sale, especially homes in the entry-level price range."

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