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REALTORS® generally reported “strong” buyer traffic in their local markets in June 2015, according to the June 2015 REALTORS® Confidence Index Survey.[1] The REALTORS® Buyer Traffic Index was essentially unchanged at 67 (68 in May 2015; 58 in June 2014). An index greater than 50 indicates that more respondents viewed traffic as “strong” than those who viewed traffic as “weak.” Sustained job creation of about 220,000 jobs monthly, lower annual mortgage insurance premiums for FHA-insured loans, and the availability of three percent down-payment on conventional loans are factors that are likely propping up home-buying activity. However, there were some reports that the increase in interest rates to above four percent has slowed some markets (e.g., Texas, Washington, and Maine).
Seller traffic was still broadly “weak” although slightly improving. The REALTORS® Seller Traffic Index was unchanged at 48 compared to the previous month, although higher compared to a year ago (48 in May 2015; 44 in June 2014). Construction of new homes is short by approximately 400,000 units relative to the normal annual pace of 1.5 million units required to meet household formation and the replacement of obsolete housing. REALTORS® reported a severe inventory shortage in most areas, especially for properties in the lower price range and for those that are move-in ready.
[1] Respondents were asked “How do you rate the past month's traffic in the neighborhood(s) or area(s) where you make most of your sales?” The responses were “Strong”, “Moderate,” and “Weak.”
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