REALTORS® Upbeat on Housing Outlook
REALTORS® remain mostly confident in the next six months of the real estate market, thanks to 30-year fixed rates still below 4 percent, continued job growth, and recent measures that have made credit more accessible and cheaper, according to the April 2015 REALTORS® Confidence Index Survey, which is based on responses from more than 1,000 REALTORS® about their latest transactions.
Across all property types (single family, townhomes, and condos), the number of respondents indicating the market as “strong” outnumbered those who viewed the market as “weak.”
With stronger buyer demand and tight supplies, homes continue to sell relatively quickly, typically within 39 days in April, according to the survey. Also, REALTORS® increased their price expectations last month. Those surveyed expect prices to increase at a faster pace in the next 12 months with the median expected price growth to be 3.9 percent (up from 3.5 percent expectation in March’s survey). REALTORS® in Colorado were the most upbeat about price increases in the U.S., with median expected price growth at 6 percent, followed by the District of Columbia at 5 percent.
REALTORS® also cited recent measures to open the credit box as having a profound impact on the housing market, such as with the Federal Housing Administration tolower its mortgage insurance premiums and the re-introduction from Fannie Mae and Freddie Mac to back 3 percent down payment loans.
REALTORS® are the most upbeat about the overall housing market in states like North Dakota, Texas, Oklahoma, California, Oregon, Washington, Florida, New York, and Massachusetts, according to the survey. Also, REALTORS® outlook over the townhome and condo markets remained highest in Colorado.
For-sale inventories remain tight in many states but seller traffic was reported as improving in many areas, particularly Utah, Wyoming, South Dakota, Texas, Missouri, Louisiana, Mississippi, Alabama, South Carolina, and New Hampshire.
While real estate professionals remain generally optimistic about housing’s outlook for the next six months, real estate professionals’ continued to have the following concerns about the market:
- Tight inventory in most states especially for move-in ready and “affordable” units;
- Financing issues, such as qualifying for a mortgage still remains tough and the underwriting process is slow, leading to delayed closings;
- Appraisal valuation concerns and delays due to “questionable” comps, particularly for FHA/VA loans, use of “out-of-town appraisers”, and second appraisal requirements;
- Impact of the new mortgage procedures (RESPA-TILA) on closings;
- Negative impact of low oil prices in states with oil/gas production;
- Slowing demand from international buyers (e.g., Canadians) due to strong US dollar;
- Uncertainties associated with flood insurance rates;
- Impact of upcoming interest rate increase on demand.