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REALTORS’® confidence about the outlook for the next six months improved significantly in December, according to the December 2014 REALTORS® Confidence Index Survey. In the single family market, the REALTORS® Confidence Index - Six-month Outlook increased to 67 (60 in November 2014; 66 in December 2013). An improving jobs market, the decline in the 30-year mortgage rate to about 4 percent, and recent measures by the Federal Housing Authority to lower the monthly mortgage insurance premium from 1.35 percent to 0.85 percent and the GSEs (Fannie Mae and Freddie Mac) to buy mortgages with 97% loan-to-value ratio may be underpinning this increased optimism. Optimism also picks up in anticipation of the seasonal uptick in the spring season.
Across many states[1], the index was greater than 50, which means that the number of respondents who have a “strong” outlook outnumbered those with “weak” outlook. The outlook for single family homes was strongest in North Dakota, Colorado, and Texas (red). However, REALTORS® in states that are heavily reliant on oil and gas such as Texas and North Dakota have started to caution about the effect of falling oil prices.
[1] The market outlook for each state is based on data for the last 3 months to increase the observations for each state. Small states such as AK,ND, SD, MT, VT, WY, WV, DE, and the D.C. may have less than 30 observations.
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