Economists' Outlook

Housing stats and analysis from NAR's research experts.

Most REALTORS® Expect Strong Market Conditions in the Next Six Months Based on April–June 2016 Surveys

In the monthly REALTORS® Confidence Index Survey, the National Association of REALTORS® (NAR) asks members “What are your expectations for the housing market over the next six months compared to the current state of the market in the neighborhood(s) or area(s) where you make most of your sales?” NAR compiles the responses into a REALTORS® Confidence Index—Six-Month Outlook. An index above 50 indicates that more respondents view markets as “strong” rather than “weak.”

The following maps show the REALTORS® Confidence Index—Six-Month Outlook across property types by state, according to the June 2016 REALTORS® Confidence Index Survey Report.[1]

Compared to current conditions in the single-family homes market, the market outlooks in the next six months are “strong” to “very strong” in the District of Columbia and in all states except Alaska. Sustained job creation and the low cost of obtaining a mortgage appear to be sustaining housing demand even as homes have become increasingly unaffordable.

sf outlook
In the townhomes market, the outlook varies from “very weak” in Alaska and Mississippi, “moderate” and “strong” in many states, and to “very strong” in Colorado, Nebraska, and the District of Columbia.
townhome outlook
In the condominium market, the outlook in the next six months is expected to “very weak” to “weak” in 27 states. The June survey was conducted before the approval of H.R. 3700, the “Housing Opportunity Through Modernization Act of 2016” by both the House of Representatives and the Senate, so the survey results do not yet reflect the expected positive impact of this law on the condominium market. Compared to the detached single-family home and townhome markets, the condominium market has recovered more slowly because many condominium projects did not meet the eligibility requirements of the Federal Housing Authority so interested buyers of condominium units have been unable to obtain financing.[2] The approval of H.R. 3700 is expected to increase access to FHA condominium financing by addressing a number of restrictive conditions regarding owner-occupancy requirements, the condominium re-certification process, mixed-use buildings, and private transfer fees.[3] Under the new regulation, condominiums that are 35 percent owner occupied are eligible for FHA-insured financing, a lower barrier than the current requirement of 50 percent.

condo outlook

[1] The market outlook for each state is based on data for the last three months to increase the observations for each state. Small states such as AK, ND, SD, MT, VT, WY, WV, DE, and D.C., may have fewer than 30 observations. Respondents rated conditions or expectations as “Strong (100),” “Moderate (50),” and “Weak (0).” The responses are compiled into a diffusion index. A diffusion index greater than 50 means more respondents rated conditions as “Strong” than “Weak.” For graphical purposes, states with index values 25 and lower are labeled “Very weak,” values greater than 25 to 49 are labeled “Weak,” a value of 50 is labeled “Moderate,” values greater than 50 to 75 are labeled “Strong,” and values greater than 76 are labeled “Very strong.”

[2] Only 20 percent of condominiums are eligible for FHA condominium unit financing because of strict eligibility criteria such as those pertaining to occupancy requirements, commercial space  requirements, and delinquent dues. FHA and the GSEs have financing eligibility criteria relating to ownership occupancy requirements, delinquent dues, project approval process, and use for commercial space, among others. See NAR’s position at http://www.realtor.org/news-releases/2015/10/nar-president-testifies-before-house-subcommittee-in-support-of-fha-reforms

[3]The bill, which was championed by NAR, passed  the House of Representatives 427-0 and the Senate under unanimous consent on July 14, 2016. The bill is on the way for the President’s signing. See http://www.realtor.org/articles/hr-3700-heading-to-president

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.

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