Economists' Outlook

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Highlights of the April 2017 REALTORS® Confidence Index Survey Report

While local conditions vary, the REALTORS® Buyer Traffic Index and the REALTORS® Confidence IndexCurrent Conditions for single-family homes, townhomes, and condominiums remained above 50 in April 2017, indicating that more respondents reported “strong” than “weak” conditions. Both indices were higher than their levels one year ago and in the previous month, except the condominium index which was at the same level as the previous month.[1] The REALTORS® Seller Traffic Index was unchanged from its level one year ago, but it increased from its level in the previous month. It has remained below 50 since March 2008, indicating that seller activity is still “weak,” based on the April 2017 REALTORS® Confidence Index Survey Report, a monthly survey of REALTORS® about their sales activity and local market conditions.[2]

First-time homebuyers accounted for 34 percent of sales.[3] Amid sustained job creation, the share of first-time homebuyers has been on a modest rise, up from 29 percent in 2014. With fewer new foreclosures, distressed properties accounted for five percent of sales, purchases for investment purposes made up 15 percent of sales, and cash sales accounted for 21 percent of sales. Amid tight supply, half of properties that sold in April 2017 were on the market for 29 days or less compared to 39 days in April 2016. The April median days on market measure is a new low in this history of the series which goes back to 2011.

Lack of homes for sale was the main issue reported by REALTORS®. Respondents reported a mixed effect from the uptick in mortgage rates since November 2016; some buyers are encouraged to act quickly while others are discouraged by diminished affordability. With sales typically strong in the summer, more respondents expect the outlook to be “strong” than “weak” in the next six months compared to current conditions in the single-family, townhome, and condominium markets.

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[1] An index greater than 50 indicates the number of respondents who reported “strong” (index=100) outnumbered those who reported “weak” (index=0). An index equal to 50 indicates an equal number of respondents reporting “strong” and “weak” market conditions. The index is not adjusted for seasonality effects.

[2]The author thanks Meredith Dunn, Research Communications Manager; and Amanda Riggs, Research Survey Analyst for their comments. Any errors are attributable to the author.

[3] NAR’s 2016 Profile of Home Buyer and Sellers (HBS) reports that among primary residence home buyers, 35 percent were first-time home buyers, up from 32 percent in 2015. The HBS surveys primary residence home buyers, while the monthly RCI Survey surveys REALTORS® and captures purchases for investment purposes and vacation/second homes.

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