Realtors more upbeat about the recovery

04/30/2015

Realtors more upbeat about the recovery

WASHINGTON – April 29, 2015 – Realtors® confidence in the state of the housing market grew more widespread in March compared to a year ago, according to the latest Realtor Confidence Index, a monthly survey of real estate professionals about their transactions.

Realtors reported more buyer demand in March due to the lower downpayment requirements for Freddie Mac and Fannie Mae-backed loans (from 5 percent to 3 percent), as well as lower Federal Housing Administration (FHA) monthly mortgage insurance premiums.

Also raising confidence: "The seasonal uptick in market activity during spring and summer, low interest rates and a sustained growth in jobs … are likely [also] underpinning the improved market confidence," the report said.

Overall, the Realtor confidence index was above 50 across all property types for the six-month outlook. A reading about 50 indicates that more respondents view the market as "strong" than "weak."

Buyer traffic was reported as broadly "strong" in most states. Washington, Oregon and Colorado saw some of the biggest growth in home buyer traffic, according to the report.

About 57 percent of Realtors surveyed said that the price of their "average home transaction" was higher in March compared to a year earlier. Rising buyer demand coupled with a constrained inventory of for-sale homes has caused home prices to rise this year, after having slowed in 2014.

Realtors expected prices to increase more in the next 12 months, with the median estimate at 3.5 percent. The states that are the most upbeat about higher price expectations are Colorado, Washington, Oregon, Nevada and Florida, which expect prices to rise between 4 percent to 5 percent over the next year.

Despite an uptick in overall optimism over the market, real estate professionals did note several concerns, including:

  • Tight inventory in most states, especially for move-in ready and "affordable" units (however, Realtors in some areas says supply is normalizing)
  • Significant lender delays and a number of delayed closings
  • Appraisal valuation issues and delays due to "questionable" comps especially for FHA/VA loans, the use of "out-of-town appraisers," and second appraisal requirements
  • More stringent home inspection, repair and insurance requirements, especially for older homes
  • Adverse impact of low oil prices in states with oil/gas production
  • Slowing demand from international buyers, particularly Canadians, due to the strong U.S. dollar
  • Uncertainties associated with flood insurance rates

The Realtors Confidence Index can be downloaded through NAR's website.

© 2015 Florida Realtors®

 

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