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While local conditions vary, the REALTORS®Buyer Traffic Index and the REALTORS® Confidence Index—Current Conditions for single-family homes remained above 50 in January 2017, indicating that more respondents reported “strong” than “weak” conditions, according to the January 2017 REALTORS® Confidence Index Survey Report, a monthly survey of REALTORS® about their sales activity and local market conditions. Both indices were higher than their levels one year ago and in the previous month.[1] The REALTORS® Seller Traffic Index also increased slightly from its levels one year ago and in the previous month, but it has remained below 50 since December 2008, indicating that seller activity is still “weak.”
In January 2017, first-time homebuyers accounted for 33 percent of sales.[2] Amid solid 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 seven percent of sales, purchases for investment purposes made up 15 percent of sales, and cash sales accounted for 23 percent of sales. Amid tight supply, half of properties that sold in January 2017 were on the market for 50 days or less compared to 64 days in January 2016.
Lack of supply and appraisal-related problems were the main issues reported by REALTORS®. Respondents also expressed concern about the impact of rising mortgage rates and economic policy changes under the Trump administration on the recovery of the housing market. Overall, respondents remained confident about the outlook over the next six months for the single-family homes, townhomes, and condominiums markets, with the six-month outlook confidence indices for each of these markets registering above 50.
[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] NAR’s 2016 Profile of Home Buyer and Sellers (HBS) reports that among primary residence home buyers, 35 percent were first-time homebuyers, up from 32 percent in 2015. The HBS surveys primary residence homebuyers, while the monthly RCI Survey surveys REALTORS® and also captures purchases for investment purposes and vacation/second homes.
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