November/December 2013 Market Pulse

Pent-up buyer demand may lift the market soon, but for now interest rates and lending standards are holding down home sales as the year winds to a close.

November 2, 2013

Rising interest rates and continuing tight underwriting could dampen sales as the year winds down. Still, 2013 sales will be up significantly from 2012. Appreciation remains robust, largely because of tight inventories. Interest rate concerns are reducing practitioner confidence. One bright spot: pent-up buyer demand by young households. As adults under 35 start to move out of their parents’ homes, home sales stand to benefit. All trend lines are from August 2012 to August 2013.

Existing-home sales is a seasonally adjusted annual rate, which is the actual rate of sales for the month, multiplied by 12 and adjusted for seasonal sales differences. Pending home sales is an index that measures -housing contract activity. An index of 100 is equal to the level of activity during 2001, the benchmark year. Price indicates the national median. Inventory measures the number of existing homes on the market at the end of the month. Buyer and seller traffic, current conditions, six-month expectations, and time on market derive from a monthly REALTOR® Confidence Index. Results for August are based on 3,171 responses to 6,000 surveys sent to large and small real estate offices. The survey asks practitioners to indicate whether conditions are strong (100 points), moderate (50), or weak (0). Some data may be revised from previous issues.