Economists' Outlook

Housing stats and analysis from NAR's research experts.

Market conditions vary across local markets, but the REALTORS® confidence and traffic indices indicate that overall market activity picked up slightly in March 2016 compared to one year ago and to the previous month, according to the March 2016 REALTORS® Confidence Index Survey Report. REALTORS® reported strong demand, but severely low inventory in many states has weighed heavily on sales and has pushed prices up, making homes increasingly unaffordable, especially for first-time buyers.

First-time home buyers accounted for 30 percent of sales. Purchases for investment purposes made up 14 percent of sales, while distressed properties were eight percent of sales. Cash sales accounted for 25 percent of sales. Nationally, properties typically were on the market 47 days and took 39 days to close the contract. There are reports that the TILA/RESPA disclosure guidelines have led to longer rate lock and escrow periods.[1]

Very low supply, steep price increases, and lender processing delays were reported as the key issues affecting sales, especially to first-time home buyers. Appraisal backlogs and below-market” and “inconsistent” appraisals were also reported to be causing transaction delays and cancellations.The collapse in oil prices remains a concern in the oil-producing states of North Dakota, Alaska, New Mexico, Wyoming, Oklahoma, Texas, and Montana. Still, with the spring and summer months coming, respondents were generally confident about the outlook for the next six months across all property types[2]. Respondents typically expected prices to increase 3.7 percent in the next 12 months.

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[1] The TILA‒RESPA Integrated Disclosure (TRID) regulations came into effect on October 3, 2015. The new guidelines are intended to provide disclosures that will be helpful to consumers in understanding the key features, costs, and risks of the mortgage for which they are applying.

[2] The indices are not seasonally adjusted.

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