REALTORS® Stay Upbeat in Market Outlook
July 9, 2015
REALTORS®' outlook is increasingly optimistic about the housing market in the months ahead. Confidence is staying high, buoyed by a strengthening economy and the opening of the credit box.
Read more: NAR: 'Buyers Are Coming Back In Force'
Behind that growing confidence, job creation has reached a pace of about 220,000 jobs per month this year, lower FHA monthly mortgage insurance premium rates have unlocked borrower savings, and doors have been opened for home buyers with the availability of 3 percent down payment loans backed by Fannie Mae and Freddie Mac, according to the latest REALTORS® Confidence Index Survey. The survey is based on more than 3,800 responses from REALTORS® about market conditions in their area.
For the fifth consecutive month, indices rose above 50 for all property types, reflecting strong confidence in the next six months. The single-family market had the highest confidence at 74 on the index, while townhomes registered at 55, and condos at 50. An index of 50 or more indicates more respondents view conditions as "strong" than "weak."
Still, survey respondents say challenges persist. REALTORS® identified the following challenges that still threaten market conditions:
- Limited inventories of homes for-sale;
- Financing issues, like difficulty in qualifying for a mortgage due to higher FICO credit scores and down payment standards;
- Appraisal issues with conservative estimates, use of "out-of-town appraisers," or slow turnarounds;
- New mortgage disclosure rules -- known as TRID regulations -- that could potentially delay closing/settlement of transactions;
- Dampening effect of higher interest rates in the future (although anticipation of higher rates can spur demand in the short-term);
- Declining demand from international buyers due to a strong U.S. dollar; and
- Lack of FHA-approved condos.
Updated: April 18, 2019