Sentiment Among REALTORS® Retreats Further as Mortgage Rates Rise
Higher mortgage interest rates have pushed REALTOR® sentiment to a level not seen since Fall 2023, when mortgage rates were near 8%.
The Market Outlook from the REALTORS® Confidence Index declined for both buyers and sellers on a monthly and annual basis.
- 8% of respondents expect buyer traffic to increase year-over-year in the next three months, down from 13% one month ago and 20% one year ago.
- 13% of respondents expect seller traffic to increase year-over-year in the next three months, down from 17% one month ago and 19% one year ago.
Supply remains limited relative to demand in some markets, with 16% of homes selling above list price. This was unchanged from last month but down from 21% one year ago.
- Homes received an average of 2.2 offers, essentially unchanged from 2.1 last month and 2.3 one year ago.
- 27% of buyers paid cash, unchanged from last month and down from 30% one year ago.
- 4% of buyers purchased a home based solely on a virtual tour, showing, or open house without physically visiting the property, essentially unchanged from one month and one year ago.
Contracts typically closed in 30 days, unchanged from both last month and one year ago. However, some contracts experienced delays or termination.
- 7% of contracts were terminated in the last three months, unchanged from last month and up slightly from 6% one year ago.
- 16% of contracts experienced delayed settlement, up from 14% last month and one year ago.
- 5% of contracts experienced delays because of appraisal issues, similar to recent levels.
First-time buyers represented 31% of all buyers, essentially unchanged from both last month and one year ago.
- 20% of purchases were for non-primary residences, up from 15% last month and one year ago.
- 8% of purchases were for vacation use, up from 7% last month and 5% one year ago.
- 2% of sellers sold their property to an iBuyer, unchanged from recent levels.
- 2% of sales were distressed sales, unchanged from both last month and one year ago.
Contract activity showed a mixed picture regarding buyers waiving contingencies.
- 20% of buyers waived the inspection contingency, unchanged from last month and nearly unchanged from one year ago.
- 18% of buyers waived the appraisal contingency, down from 22% last month and roughly in line with one year ago.
Most buyers continued to search outside urban centers, with 84% purchasing in suburban, small-town, rural, or resort areas. This share was essentially unchanged from last month but slightly below one year ago.
