ShareMarket conditions vary across local markets, but the REALTORS® confidence and buyer traffic indices indicate that market conditions were mainly “strong” rather than “weak” in May 2016, according to the May 2016 REALTORS® Confidence Index Survey Report.
The indices also indicate that housing market activity was substantially unchanged compared to one month ago and one year ago.[1] Across all property types, REALTORS® reported strong demand and brisker sales in their areas, but severely low inventory continued to depress sales, pushing prices up and making homes increasingly unaffordable, especially for first-time buyers. Sustained job growth and the low cost of obtaining a mortgage, with 30-year fixed rates still below four percent, are likely underpinning the strong housing demand.
First-time homebuyers accounted for 30 percent of sales. Purchases for investment purposes made up 13 percent of sales, while distressed properties were seven percent of sales. Cash sales accounted for 22 percent of sales. Nationally, amid tight supply, half of properties that sold in May 2016 were on the market for 32 days compared to 40 days in the same month last year.
Very low supply, declining affordability, appraisal issues, and lender processing delays were reported as the key issues affecting sales. Still, most respondents were confident about the outlook for the next six months across all property type. Respondents typically expected prices to increase 3.3 percent in the next 12 months.
