REALTORS® Reported More Home Tours but Fewer Offers in July 2017

One indicator of the strength of homebuying demand is the number of client home tours. REALTORS® reported that, on average, they took about six clients on a home tour in July 2017, up from four clients one year ago, according to NAR’s July 2017 REALTORS® Confidence Index Survey.

However, even as more clients went on a home tour, REALTORS® wrote on average 2.2 offers per client taken on a home tour, which appears to be slightly lower than the 2.5 written offers per client taken on a home tour in the same period last year. Higher price appreciation that have made homes less affordable may explain why fewer offers were written per client. Home prices have been appreciating in the face of tight supply of homes for sale.

The desire to buy a home remains strong as mortgage rates have fallen to below four percent again since February 2017 and 16.2 million jobs created since October 2010. However, inventory remains woefully low, with inventory of existing and new homes for sale as of the end of July 2017 equivalent to 4.4 months of the monthly pace of sales. Inventory has been tight for the last 12 years (4.5 months’ supply in May 2005).