While local conditions vary, the REALTORS® Buyer Traffic Index and the REALTORS® Confidence Index—Current Conditions for single-family homes, townhomes, and condominiums remained above 50 in March 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.[1] The REALTORS® Seller Traffic Index decreased from its level one year ago, but it increased from its level in the previous month. It has remained below 50 since February 2008, indicating that seller activity is still “weak,” based on the March 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 32 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 six 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 March 2017 were on the market for 34 days or less compared to 47 days in March 2016.
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 the coming of spring and summer, more respondents expect the outlook to be “strong” than “weak” in the next six months compared to current conditions. The six-month outlook confidence indices for the single-family home, townhome, and condominium markets each registered above 50, with the indices all higher compared to their levels one year ago.
[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 Danielle Hale, Managing Director, Housing Research; 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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