Economists' Outlook

Housing stats and analysis from NAR's research experts.

Foot Traffic: Diffusion Index

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.  In the latest reading, the diffusion index for foot traffic eased modestly from 66.3 in November to 63.1 in December.

Despite November’s decline in the diffusion index, the measure stands well above 50, indicating that more than half of the markets in this panel had stronger foot traffic in December of 2012 than the same month a year earlier.  This reading does not suggest how much of an increase in traffic there was, just that the increase was broadly spread across the US.  Foot traffic had seesawed for several months, but this pattern appears to have stabilized.

Given the strength of sales last spring, the December reading suggests that sales through the early spring of 2013 will also be robust.  Fundamentals are in place as record low mortgage rates and modestly improving employment continue to boost buyer confidence.  Though inventories are constrained in portions of the U.S., rising prices will help to unlock inventory held off market by underwater owners and equity-strapped fence sitters.  Finally, clarity on the QM and QRM rules should provide lenders with the clarity needed to begin to ease underwriting to sound, historical norms later in 2013.

Notice: The information on this page may not be current. The archive is a collection of content previously published on one or more NAR web properties. Archive pages are not updated and may no longer be accurate. Users must independently verify the accuracy and currency of the information found here. The National Association of REALTORS® disclaims all liability for any loss or injury resulting from the use of the information or data found on this page.

Advertisement

Comment Policy

The opinions expressed in reader comments sections on this website are those of the reader and not NAR or REALTOR® Magazine.

About Economists' Outlook

Visit this blog daily to see what NAR experts are saying about the economy, the housing market, and other factors that will impact your business.

Housing Minute

Housing Minute is a monthly video series highlighting the latest housing data from the National Association of REALTORS® in a minute or less.