Economist's Outlook

The Latest on Unemployment Insurance Claims

n each Economic Update, the Research staff analyzes recently released economic indicators and addresses what these indicators mean for REALTORS® and their clients. Today’s update discusses the latest unemployment insurance claims data.

  • The claims in unemployment insurance filed by those starting a period of unemployment continued to normalize with the reopening of the federal government after a two-week shutdown. The seasonally adjusted initial claims for unemployment insurance filed in the week ending October 26 dropped to 340,000 which is 10,000 claims fewer than previous week’s number. In the wake of the shutdown, claims spiked up to 373,000.
  • Fewer number of claims filed means workers are keeping their existing jobs. However, job creation still remains lackluster given the slow pace of economic growth with tighter government spending being the drag on growth.  Yesterday, the ADP – a payroll company that processes payrolls- reported an increase of only 130,000 payroll jobs.
  • In relation to the low job creation, the Federal Operations Market Committee of the Federal Reserve Board released a statement yesterday that the federal funds rate will be kept at 0 to ¼ percent in light of the slow pace of job creation and the absence of inflationary pressure. The Fed statement, however, pointed to a possible tapering before the year end. Mortgage rates are likely to have a hit a monthly low and could steadily rise.

Latest Case Shiller Index

In each Economic Update, the Research staff analyzes recently released economic indicators and addresses what these indicators mean for REALTORS® and their clients. This update discusses the latest Case Shiller price index.

  • Case Shiller data is yet another source confirming that home price increases continued in August 2013. The 10-city and 20-city indexes each rose by 12.8 percent from August 2012. NAR data released last week showed a gain of 13.4 percent in the same period and showed continued but slowing gains of 11.7 percent in the year ending September 2013.
  • While this increase was the 15th consecutive month of year-over-year increases in home prices reported by the 20-city index and the 6th consecutive month of double-digit year-over-year gains, the index remains 20 percent below the peak it reached in July 2006.
  • NAR reports the median price of all homes that have sold while Case Shiller reports the results of a weighted repeat-sales index. Because home sales among higher priced properties have been growing more than among lower price tiers, the NAR median price has risen by more than the weighted repeat sales index—which computes price change based on repeat sales of the same property.
  • Case Shiller uses public records data which has a reporting lag. To deal with the lag, Case Shiller data is based on a 3 month moving average, so reported August prices include information from repeat transactions closed in June, July, and August. For this reason, the changes in the NAR median price tend to lead Case Shiller. NAR data showed decelerating but continued double-digit growth in September, so expect repeat prices to follow suit.
  • Case Shiller reports price indexes for the 20 cities it tracks in addition to the 20-city index. By its measure of prices, Denver and Dallas are the only metro areas to have fully recovered from housing price declines to reach new highs.
  • As seen in other house price measures such as NAR’s, Case Shiller showed the biggest 1-year price growth in western cities such as Las Vegas (29.2%), San Francisco (25.4%), San Diego (21.5%), and Los Angeles (21.7%). The smallest year-over-year gains were seen in the East and Midwest in cities like New York (3.6%) and Cleveland (3.7%).

Median Days on the Market Increases to 50 Days in September

Properties are starting to stay on the market longer. The median days on the market reported by REALTORS® responding to a survey about their transactions in September 2013 indicated an increase in the median days on the market to 50 days (from 43 days in August).

Higher mortgage rates, a slow economic and job recovery, and strict mortgage underwriting standards are reported as causing some of the slowdown.

Short sales were on the market for 93 days compared to foreclosed properties at 43 days and non-distressed properties at 49 days.

What does this mean for REALTORS®? Real estate markets appear to have slowed somewhat but continue to be in relatively good condition.

The Latest on Retail Sales

In each Economic Update, the Research staff analyzes recently released economic indicators and addresses what these indicators mean for REALTORS® and their clients. Today’s update discusses retail sales.

  • The economy has been simply plodding along like a race horse on a muddy track: slow advances with no spectacular feats.  Today’s data on retail sales further confirms this trend.
  • Retail sales modestly fell in September and were up by only 3.2 percent from one year ago, not close to the more normal expansion gains of 5 to 8 percent.
  • Vehicle sales declined a bit.  But this sector had been going strong and is still up by 6 percent from one year ago.  Since the autos and trucks are typically the second most expensive purchase after a house, it is worth noting how this sector is faring to help gauge consumers’ attitude towards major expenditures.
  • Spending on furniture and gardening remained comfortably positive.  However if home sales continue to weaken further then spending in these sectors will be at risk.
  • Today’s data on weakening retail sales, combined with another of today’s data on virtually non-existent producer price inflation and yesterday’s softening pending home sales, provide assurance that the Federal Reserve will continue its active Quantitative Easing for a while longer.  The “tapering” is likely to be postponed until next year.  That means the low mortgage rates will likely stay around through the Thanksgiving holidays and possibly to Christmas.
  • With Halloween just around the corner and costumes on the mind, it is worth noting that the overall sales activity at women’s clothing shops ($3.5 billion) tends to be about five times higher than at men’s clothing shops ($740 million).  Spending patterns reflect differences in taste between the sexes.  Throughout most of history, women’s life expectancy was  notably lower compared to men’s — a complete contrast to what we observe today.  One reason was accusations of witchcraft (another Halloween topic), particularly against women; a well-known example, Joan of Arc, was one such unfortunate victim.    Also every child birth in the not too distant past was always a threat to the mother’s life.  So when we observe women shopping for clothes, take delight in the progress of humanity (and by the way, men overspend compared to women at electronic and video game stores).

REALTOR® Commercial Fundamentals Impacted by Slow Employment in Third Quarter

With lackluster employment growth, third quarter fundamentals in REALTOR® commercial markets maintained a positive trajectory. However, the specter of government shutdown and the budget debate added headwinds to the market performance. The results of the October Commercial Real Estate Market Survey indicated modestly rising absorption and new construction, accompanied by changing vacancies.

Leasing activity increased 2.0 percent higher over the previous quarter. On the supply side, new construction maintained momentum, increasing 5.0 percent over the second quarter. Vacancies declined for industrial and hotel properties. Office vacancies inched up 9 basis points, to 17.8 percent, while retail availability rose 110 basis points, to 15.7 percent. Multifamily vacancy reached 7.3 percent, as new supply entered the market and the residential rental market added competition.

With slower leasing growth, rent concessions registered a bump, leading to a slower increase in rental rates, up 1.0 percent during the third quarter. In terms of space requirements, tenant demand remained strongest in the 5,000 square feet and below, accounting for 88.0 percent of leased properties. Demand for space under 2,500 feet increased noticeably, driving one out of four lease agreements. Lease terms remained steady, with 36-month and 60-month leases capturing over half of the market.

For the full report along with respondent comments, please visit http://www.realtor.org/reports/commercial-real-estate-market-survey.

The Latest on State-by-State Job Growth Rates

In each Economic Update, the Research staff analyzes recently released economic indicators and addresses what these indicators mean for REALTORS® and their clients. Today’s update discusses job growth rates by state.

  • Jobs will become ever more critical in supporting the housing expansion as housing affordability declines.
  • Some states are doing better than others in this regard.  As one would expect, where there are jobs, good stuff is occurring in those states:  retail vacancy rates decline, the state budget situation improves, mortgage delinquencies rapidly fall, wages rise quickly, among others.
  • The following is the ranking of state-by-state in job growth over the past 12 months.
  • North Dakota has been quite amazing in terms of job growth, not only over the past year but over the past 5 years.  It even skipped the recession experienced by the rest of the country.  The state budget surplus is huge.  The unemployment rate is 3 percent, or essentially non-existent.  The starting wage rate at McDonalds to flip a burger is said to be $18 per hour.  The minimum wage mandate becomes non-relevant if the job market is robust.
  • Alaska is the only state with fewer jobs now versus one year ago.  It is unclear what the reasons are.  But don’t feel too much pity, though: Alaska would rank near the top in job growth if viewing it over the past 5 years.

REALTOR® Commercial Sales Rise 10.7 Percent in Third Quarter, Despite Headwinds

With lackluster employment growth, third quarter fundamentals in REALTOR® commercial markets maintained a positive trajectory. However, the specter of government shutdown and the budget debate added headwinds to the market performance. The results of the October Commercial Real Estate Market Survey indicated modestly rising absorption and new construction, accompanied by changing vacancies.

Leasing activity increased 2.0 percent higher over the previous quarter. On the supply side, new construction maintained momentum, increasing 5.0 percent over the second quarter. Vacancies declined for industrial and hotel properties. Office vacancies inched up 9 basis points, to 17.8 percent, while retail availability rose 110 basis points, to 15.7 percent. Multifamily vacancy reached 7.3 percent, as new supply entered the market and the residential rental market added competition.

With sliding vacancies, landlords found fewer reasons to offer rent concessions. In addition, rental rates rose 2.0 percent during the second quarter. In terms of space requirements, tenant demand remained strongest in the 5,000 square feet and below, accounting for 70.0 percent of leased properties. Lease terms remained steady, with 36-month and 60-month leases capturing the bulk of the market.

For the full report along with respondent comments, please visit http://www.realtor.org/reports/commercial-real-estate-market-survey.

REALTORS® Confidence Index Declines in September

The REALTORS® Confidence Index (RCI), an indicator of expectations about the real estate market, slid down again in September. However, confidence about market conditions still remains high relative to the past five years.

What does this mean for REALTORS®? Concern about a possible over-heated housing bubble appear to be misplaced. The economic impact of government fiscal tightening, along with other factors slowing the economy suggests a continued orderly recovery and expansion of the housing markets around the country. All real estate is local—so market experiences will vary. However, overall current expectations currently reflect a modest economic expansion accompanied by relatively normal housing markets.

To view this month’s full RCI report, visit: http://www.realtor.org/reports/realtors-confidence-index

The Latest on FHFA Data

In each Economic Update, the Research staff analyzes recently released economic indicators and addresses what these indicators mean for REALTORS® and their clients. Today’s second update discusses FHFA data on home prices.

  • FHFA data today confirmed that home price increases continued in August rising by 8.5 percent from August 2012.  Earlier NAR data showed a gain of 13.4 percent in the same period and showed continued but slowing gains of 11.7 percent in the year ending September 2013.
  • While this increase was the 19th consecutive month of year over year increases in home prices reported by the FHFA, the increase remains 9.4 percent below the peak it reached in April 2007.
  • NAR reports the median price of all homes that have sold while FHFA reports the results of a weighted repeat-sales index.  Because home sales among higher priced properties have been growing more than among lower price tiers, the NAR median price has risen by more than the weighted repeat sales index—which computes price change based on repeat sales of the same property.
  • FHFA sources data primarily from Fannie and Freddie mortgages, transactions using prime conventional financing, and misses out on cash transactions as well as jumbo, subprime, and government backed transactions such as those using VA or FHA financing.
  • FHFA releases data at the Census division level and it confirms the trend seen in NAR measures.  The most robust gains from a year ago were in the West.  Year over year prices rose 18.2 percent in the Pacific division which includes Hawaii, Alaska, Washington, Oregon, and California and 13.8 percent in the Mountain division which includes Montana, Idaho, Wyoming, Nevada, Utah, Colorado, Arizona, and New Mexico.  NAR data showed the smallest price gains from a year ago in the Northeast, and FHFA showed a similar pattern.  Prices rose 4.2 percent in New England (Maine, New Hampshire, Vermont, Massachusetts, Rhode Island, Connecticut) and 4.0 percent in the Middle Atlantic states (New York, New Jersey, Pennsylvania) from one year ago.

Mortgage Applications

In each Economic Update, the Research staff analyzes recently released economic indicators and addresses what these indicators mean for REALTORS® and their clients. Today’s update discusses mortgage applications.

  • Applications to purchase homes perked up over the last week following the end of the government shutdown and debt ceiling showdown, according to data released this morning by the Mortgage Bankers Association. While the headline figure fell 0.6%, the purchase component rose 0.7%, ending a 3-week decline. The sharp decline came despite a 25 bp decline in the average rate on a 30-year fixed mortgage over this period. The average rate did rise by roughly 15 bp in the days immediately leading up to the debt ceiling deadline, though.
  • In a bit of a surprise, conventional purchase mortgage applications declined an additional 1.7%, while the government portion of the index bounced back by a robust 7.1%. The USDA was shuttered during the government shutdown and the FHA was working with a skeleton crew. The increase in the government component nearly offset the prior week’s decline.
  • With the end of the government shutdown and debt ceiling crisis, the short-lived slide in the housing market appears to have stabilized. The IRS, FHA, and USDA may have a backlog of work in the near term in order to catch up with information requests and applications, but these “lost” sales will likely be recovered in the weeks and months ahead. However, the resolution to the shutdown and debt debate only pushed the deadlines to mid-January and mid-February, respectively, which a chance for discussion in between suggesting that we could experience this process all over again in a few months. Mortgage rates rose during the days leading up to the debt ceiling limit, but have since eased further than levels prior to the crisis indicating that average rates could move lower in next week’s reading from Freddie Mac.

The Latest on Employment Conditions

In each Economic Update, the Research staff analyzes recently released economic indicators and addresses what these indicators mean for REALTORS® and their clients. Today’s update discusses employment conditions.

  • A non-inspiring 148,000 net new jobs were created in September.  However, it brings the 12-month tally up to a very respectable 2.2 million net new jobs.
  • From the low point of few years ago, 7 million net new jobs have been added to the economy.  Note that during the downturn, 8 million jobs were lost.  The economy is therefore still shy of the prior employment peak.  All the while, a fresh stream of high school and college graduates has been entering the workforce.
  • The construction sector was one of the better performers, relatively speaking, in the latest month.  A total of 20,000 new jobs related to constructing of buildings/homes and general contractors. Much room for improvement remains, however.  There are fewer residential contractors now compared to a decade ago.
  • Government jobs have been shrinking.  The federal government sequestration and the need to balance budgets at the state and local level have been the reasons for job cuts.  Compared to early 2000, there are nearly 1.5 million more workers in the government sectors.  (The two temporary job surges in the graph below are due to part-time Census takers.)
  • The average hourly wage rose to $24.09, up 2.1 percent from a year ago.
  • The unemployment rate fell a notch to 7.2 percent.  However, the employment rate – how much of the adult population has jobs – barely budged and remains stuck at a cyclical low rate of 58 percent and change.
  • Steadily more jobs naturally mean more potential home sales and more potential commercial leasing activity.  Now that housing affordability conditions are falling, job creation becomes even more important to help sustain the recovery.
  • All great things in the world came about through work.  Nothing beats an honest day’s work for satisfaction.  Let’s hope the job recovery continues.  Also, here’s a thought: be mindful that big lottery winners have a shorter life expectancy than the general population.

    Latest Diffusion Index of Foot Traffic

    Every month NAR Research monitors foot traffic in roughly 160 markets across the country. The number of visits to actively listed homes has a strong correlation with future trends in contracts and closing for home sales. After a sharp decline in year-over-year growth of foot traffic last month, the trend shifted toward stabilization in September. This month’s measure is a more clear indication of the impact of mortgage rates on consumer interest in home purchases.

    Every month SentriLock, LLC. provides NAR Research with data on the number of properties shown by a REALTOR®. Foot traffic has a strong correlation with future contracts and home sales, so it can be viewed as a peek ahead at sales trends two to three months into the future. For the month of September, the diffusion index for foot traffic rose 26.3 points to 50.6.

    Mortgage rates rose sharply in the late spring, but stabilized by August and drifted modestly lower in September after the Federal Reserve’s Open Market Committee announced that it would not taper its purchases of mortgage backed securities. The stabilization pattern in rates helped, but the strong traffic pattern suggests that there is more robust demand in the market place.

    This month’s reading partially offsets the previous sharp decline. The index inched just above the important “50” mark in August, which indicates that more than half of the markets in this panel had stronger foot traffic in September of 2013 than the same month a year earlier. This reading does not suggest how much of an increase in traffic there was, just that the majority of markets experienced more foot traffic in September of 2013 compared to a year earlier.

    The figure for August was partially influenced by the abnormal strength of traffic in August of 2012. Consequently, this month’s figure more actually depicts the impact of the increase in mortgage rates and tight inventories. On a metro level, many of the markets that shifted to a decline in the last reading either were modestly positive this month or had a much smaller year-over-year decline compared to last month. This trend suggests a leveling off in traffic. Tight inventories, higher mortgage rates or a combination of factors are driving this pattern.

    Foot traffic shifted toward recovery in September after the sharp decline in August. This month’s reading is a clearer picture of the impact from higher mortgage rates and tight inventories as last year’s abnormal end-of-summer strength abates. The decline in rates over the last three weeks may help to ease some buyer anxiety and to preserve affordability in the near term, but rates are likely to rise over the winter and into the spring of 2014.

    Existing Home Sales by Price Category

    Did You Know: More than 11% of homes sold had a sales price over $500,000, and sales growth was highest among homes in above-median-priced categories.

    • In spite of the price variation by region, when summed to the regional level the median sales price for all regions of the US except the West falls into the $100,000 to $250,000 price range. The West is slightly outside of this range and the Northeast is near the upper edge.
    • The median price is the point at which the middle-priced home sold. By definition, half of homes in an area sold at a higher price and half of homes sold at a lower price than the median. But that’s just one part of the story. We can dig in deeper and look at the distribution of sales by price categories.
    • Doing so, we see that roughly a fifth of homes sold for less than $100,000 a year ago and that share shrank in September 2013 to 17.4 percent.
    • One year ago, homes sold at $500,000 or more were roughly 10 percent of the market; they now comprise more than 11 percent of recently sold homes.

    • There are coincident reasons for this trend: 1) sales growth is highest among homes in the highest home price tiers, and 2) home sales are shrinking in the lowest price tier—most likely a result of limited inventory in this price range as would be expected in a housing market where prices are rising.
    • Sales in the lowest price tier fell by more than 7 percent nationally while sales in higher priced categories were up by more than 30 percent from September one year ago.

    • While distressed sales as a share of closed sales ticked up in September, the longer-term trend for these properties has been down. Single-digit market share of distressed properties could be seen in the months ahead. This means smaller inventories of low-priced homes and smaller sales shares for low price homes relative to high priced homes which will mean continued upward pressure on the median price of homes compared to one year ago until additional inventories help relieve some of this pressure.

    2013 Member Profile: Age of Members

    • The median age of REALTORS® continued its climb since 2007, and is now 57-years-old. In past years, median age hovered around 52.
    • The incremental increase in age may be attributed to professionals staying in real estate longer and putting off retirement.
    • Forty-one percent of REALTORS® are more than 60 years old, while only 2 percent are under 30 years old.
    • Those who function as brokers and managers without selling tend to be the oldest.
    • For more information on the 2013 Member Profile, visit http://www.realtor.org/reports/member-profile

    63% of International Buyers Pay Cash

    International clients frequently pay all cash compared to domestic buyers: About 63 percent of reported transactions were all cash, as reported in the recently released 2013 Profile of International Home Buying Activity, which captures transactions of respondents in the 12 months ended March 2013.

    Mortgage financing tends to be a major problem for international clients due to a lack of a U.S. based credit history, lack of a Social Security number, difficulties in documenting mortgage requirements, and financial profiles that are different in some cases from those normally received by the financial institution from domestic residents. Financing-related issues accounted for about 26 percent of the reported reasons for not buying a property in the United States.

    There is a good chance of having a foreign buyer, whose expectations and needs may differ from those of U.S. buyers. The site http://www.realtor.org/global provides a substantial amount of information that may be of help to REALTORS® not experienced in dealing with international clients. Information at the site may be useful in addressing reasons why clients don’t buy—and helping to convert no-sales into sales.

    Lower Limits Could Affect Markets

    In early September, the Federal Housing Finance Agency (FHFA), the entity that oversees Freddie Mac and Fannie Mae, gave notice that it would revise the conforming loans limits in an attempt to stimulate the private sector, specifically the private mortgage securitization (PLS) market. Though any reduction in the loan limits is expected to be relatively modest, it could have more far reaching impacts at the local level and for the affected borrowers.

    Each year, the FHFA adjusts the national conforming loan limit which defines the space within which Fannie Mae and Freddie Mac can finance mortgage. The national limit is $417,000, but that varies by county and can increase to $625,500 in high cost markets. The FHA’s limits, which range from $261,050 to $725,750, are based off of the conforming limit so the FHFA’s actions would impact FHA borrowers as well.

    NAR Research estimates that if the national conforming limit were lowered to $400,000, roughly 145,000 total conforming mortgages and 49,000 conforming purchase mortgages would have been impacted in 2012 [1]. If the FHA limits were also revised, the impact would be larger by roughly 15,000 and 7,000 borrowers, respectively. The total number was inflated due to the refinance boom in 2012. However, strong price growth in 2013 has likely pushed more home buyers toward the conforming limits. Most estimates have the impacted volume at roughly 2-5% nationally.

    While the estimate of the national impact may appear relatively small, the change could have a significant effect at the local level. As depicted in the map below, the impact goes beyond the high priced markets on the coasts and would affect some smaller communities in the Midwest and South. Furthermore, several of the markets in the top 25 most impacted are in formerly distressed areas (e.g. Atlanta, Sacramento, Riverside-San Bernadine, Oakland, Tampa, and Phoenix). These are areas where FICO scores declined in recent years as a result of the economic and housing downturn and where investors have played an important role in their recovery. As prices rise and rent growth flattens, investors will pull back and it is not clear that the PLS industry is currently ready to provide financing for the nascent volume of home buyers needed to fill the void. Some private mortgage insurers recently announced willingness to underwrite mortgages with FICOs between 620 and 680. It will be particularly interesting and instructive to see how lenders respond to this change. But requirements at jumbo lenders and PLS remain significantly higher with minimum FICO scores above 720, down payments of 20% or more, and cash reserves of nine months or more. Fannie Mae and Freddie Mac as well as the FHA have new programs to help borrowers in these distressed areas, but they are less potent if reduced limits disqualify borrowers.

    Beyond the distressed areas, borrowers pushed into the non-conforming space or from FHA to convention-conforming market may not have the same access to credit due to higher FICO, down payment, and reserve requirements. Since mortgage rates are already at parity or better in the jumbo space and part of the conforming-conventional, if a borrower had sufficient credit quality, the down payment, and the reserve requirements they likely would have already migrated to the private sector. Similarly, the FHA has been underpriced by the private MIs at the middle and upper price echelons since the fall of 2012. Lowering the limits could create a binding equity or credit constraint for the remaining borrowers in this space.

    Finally, it isn’t clear that lowering the limits will stimulate the PLS market. There are still a number of issues hindering the PLS market including representation and warrants risk, the unfinished QRM rule, concerns about the implementation and ramifications of the qualified mortgage (QM) rule, secondary market reform and lingering negative investor sentiment. Nor is it clear that bank portfolios will expand to sustain these borrowers. The FHFA might accomplish its goal of expanding the private sector’s market share, but this feat would be accomplished by reducing the total number of borrowers, not by pushing borrowers into the private space.

    Though well intended, a reduction in loan limits could crowd out many otherwise qualified and sustainable borrowers. There may be a time when the PLS sector is ready, but it isn’t clear that PLS issuers are ready to take up the baton of borrowers impacted by lowering the limits.

    [1] Based on analysis of 2012 HMDA dataset

    Latest Mortgage Applications Data

    • Today’s report on mortgage applications from the Mortgage Bankers Association indicates that the government shutdown has had an impact on the housing market. The purchase component fell 4.8% this week relative to last, the third consecutive decline. The three-week decline in applications came at the same time that average mortgage rates fell nearly 0.25 percentage points.
    • Due to the government shutdown, lenders have been unable to get the form 4506-T from the IRS. Lenders use this document to verify a borrower’s income. However, lenders can also use W-2s and tax records to verify this information though it is more time consuming, costly, and requires more scrutiny. As a result, the shutdown of the IRS has been more of an inconvenience. However, the shutdown has furloughed the majority of FHA employees so transactions requiring special treatment like condos are not being completed. The complete closure of the USDA’s rural housing program is also having an impact as this program serves nearly 125,000 borrowers a year. As a result, applications through government programs fell 7.4% this week as compared to 3.9% in the conventional space, a reflection of the direct impact of the furloughs.
    • Mortgage rates have crept up in recent days in response to market jitters that the US might hit the debt ceiling, but they remain relatively low. However, applications have fallen due to the direct impact of the budget impasse and government furloughs. While the immediate impact has been relatively modest, the impact will grow if consumer confidence erodes. Still, inventories remain tight, underwriting is sound, construction is tepid, and affordability is strong, so the near term impacts would be muted relative to the last recession.

    No Data for CPI and COLA

    • Because of the government shutdown, there is no data on the consumer price index (CPI).
    • Today, based on CPI, was to be the day to compute the Cost-of-Living-Adjustment (COLA) for social security payments beginning next year. The rise would likely have been 1.3 percent to 1.6 percent.
    • A tame inflation permits the Federal Reserve to continue the ultra-loose monetary policy of keeping short-terms rates low and continuing Quantitative Easing (printing of the money to buy bonds) for a longer period.  Low inflation is also good to keep longer-term interest rates low as the lenders do not have to mark-up extra in order to compensate for the future loss in purchasing power of money.
    • With no data, we don’t know what happened last month, but a very long trend is not much impacted by a single month of data. Over the past 30 years, price growths have been the following for select items below.
    • Note that prices more than doubled for all items and services (+133%). Colleges may be ripping off students, particularly acute now given the great underemployment among many recent college graduates.
    • Of note for housing (in green below), rents rose by 167% while home prices rose by 197%. For those locked-in to 30-year fixed rate mortgages, the payment never changed. Property taxes, lawn care, and other maintenance costs no doubt rose, however.

    2013 Member Profile: Prior Full Time Careers of REALTORS®

    • NAR members come from diverse backgrounds, with prior careers in many fields.
    • The most common past job was in management, business, or the financial sector, followed by sales or retail. Other common previous careers were office and admin support and the education sector.
    • Only six percent of members had their first career in real estate.
    • For more information on the Member Profile, visit: http://www.realtor.org/reports/member-profile

    Video Increasingly Important in the Home Search

    Click to view larger image

    • According to the Digital House Hunt, a joint report between NAR Research and Google, there is an opportunity for REALTORS® to market to home shoppers in online video environments.
    • New home buyers place an emphasis on virtual tours and videos showcasing properties and communities.
    • Finding an agent and agent related searches on YouTube grew 46% year-over-year.
    • Number of agent-related videos on YouTube:
      • 19,200 results for how to find a real estate agent;
      • 88,400 for real estate agent;
      • 118,000 for buying a home
    • Home buyers who purchased previously owned homes are more likely to bring their online research offline by walking through or driving by a home they viewed online.