REALTORS® Confidence Index Survey: June 2015 Survey Highlights

The information provided by REALTORS® based on their client interactions indicates that the real estate market remained broadly “strong” in many local markets in June 2015, according to the June 2015 REALTORS® Confidence Index Survey Report.

The REALTORS® Confidence Index Current Conditions and REALTORS® Confidence Index Six-Month Outlook indices were above 50 for single-family and townhome sales but fell below 50 for condominium sales. An index greater than 50 indicates that the number of respondents who viewed the market as “strong” outnumbered those who viewed the market as “weak.” The REALTORS® Buyer Traffic Index was also above 50, while the REALTORS® Seller Traffic Index remained below 50, an indication of tight supply across many local markets. With strong demand amid tight supply, properties typically sold within 34 days nationally. First-time home buyers accounted for 30 percent of sales. Cash sales slid to 22 percent of sales as purchases for investment purposes dipped to12 percent, and distressed properties dropped to eight percent of sales.

Realtors® noted a number of issues weighing down the market’s momentum:

• Tight inventory.
• Affordability issues: fewer affordable homes, so sellers are also hesitant to move.
• Financing issues: difficulty in qualifying for a mortgage due to higher FICO credit score and down-payment standards, protracted mortgage approval process, and condominium-financing issues.
• Appraisal issues: conservative estimates, “out-of-town appraisers,” and slow turn-around.
• TRID regulations that may delay closing/settlement of transactions.
• Rising interest rates.
• Declining demand from international buyers due to a strong U.S. dollar.
• Uncertainty about flood insurance rates and reform.