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Updated: 1 hour 3 min ago

Seasonal Housing Slowdown

7 hours 30 min ago

Many local markets have been red-hot. A home seller might be tempted to wonder what is wrong with their home or REALTOR® if a buyer is not found in a month. Throughout this past summer, nearly half of homes listed found a willing buyer within a month: the median days on market nationally was 34 days from April to August. The pace was faster in the Pacific Northwest and a bit slower in the New England states, but this broadly brisk rate of sales will not last because autumn is here and winter is ahead.

View Lawrence Yun’s full Forbes article here.

Helping Family with A Downpayment For Their Dream Home

11 hours 2 min ago

Consumers across income and education brackets would greatly benefit from increased awareness and financial understanding on downpayment requirements needed to obtain a mortgage. In NAR’s September Housing Opportunities and Market experience (HOME) report, a quarterly index measuring consumer sentiment on the housing market, respondents were asked topical questions regarding downpayments. The report found that 14 percent of respondents believe they need less than 10 percent for a mortgage downpayment. Thirty-four percent believe that need more than 20 percent for a downpayment.


For those that currently own a home, 35 percent—the largest share—believe they need 15 to 20 percent for a downpayment, and 13 percent believe they need five percent or less—the smallest share. For respondents 34 years and younger, 37 percent believe they need more than 20 percent, as did 43 percent of those 65 years or older. Four in 10 people with an income of less than $50,000 believe they need more than 20 percent as do nearly half of respondents with no college education.

The September survey also asked if respondents whether they helped out a family member with a downpayment and if they received downpayment assistance from family. For all respondents, only 16 percent had helped out a child or family member with a downpayment. Respondents from rural areas (19 percent) were more likely to help a child or family member with a downpayment than in urban areas (14 percent). Respondents with an income of over $100,000 (19 percent) were also more likely to help a family member than those that make less than $50,000 (14 percent). Respondents that own a home (20 percent) are twice as likely to help out a family member with a downpayment as those that rent (nine percent) or live with someone else (10 percent). Respondents that offered downpayment assistance increased with age.

For all respondents, 19 percent have received a downpayment from a parent or family member. Twenty-two percent of those that make $50,000 to $100,000 received assistance with a downpayment from a parent or family member—the largest share by income group. Thirty-four percent of respondents 34 years or younger have also received downpayment assistance from family—the largest share among age group. Urban areas and the Northeast region received the greatest share of downpayment assistance as did those with some college education.

For more information on mortgage eligibility and downpayment requirements to purchase a home, please see the Buying a Home portal by the U.S. Department of Housing and Urban Development (HUD) and the Local Homebuying Programs by state.


Properties Were Typically on the Market for 36 Days in August 2016

11 hours 30 min ago

In the monthly REALTORS® Confidence Index Survey, the National Association of REALTORS® asks members “For the last house that you closed in the past month, how long was it on the market from listing time to the time the seller accepted the buyer’s offer?”

Properties stayed on the market for fewer days in August 2016 compared to one year ago amid strong demand and tight supply, according to the August 2016 REALTORS® Confidence Index Survey Report. Nationally, properties sold in August 2016 were typically on the market for 36 days (36 days in July 2016; 47 days in August 2015).11 Local conditions vary, and the data is provided for REALTORS® who want to compare local markets against other states and the national summary.

In many states, half of the properties that sold in June–August 2016 were on the market for less than 31 days.

Looking at changes in this value over the last few years, in most states, the median length of time that properties stay on the market continues to fall, amid tight inventory conditions.

11 Respondents were asked “For the last house that you closed in the past month, how long was it on the market from listing time to the time the seller accepted the buyer’s offer?” The median is the number of days at which half of the properties stayed on the market. In generating the median days on market at the state level, we use data for the last three surveys to have close to 30 observations. Small states such as AK, ND, SD, MT, VT, WY, WV, DE, and D.C., may have fewer than 30 observations.

Highlights of the August 2016 REALTORS® Confidence Index Survey

Fri, 09/23/2016 - 15:18

While local conditions vary, the REALTORS® buyer traffic and current conditions confidence indices remained above 50 in August 2016, indicating that more local markets were “strong” rather than “weak,” according to the August 2016 REALTORS® Confidence Index Survey Report.[1] The buyer traffic index, an indicator of homebuying interest, stood at about the same level as last year but was lower than the previous month’s level, perhaps reflecting some seasonal slowdown as well as an easing of demand due to the steep price growth that has made purchasing a home increasingly less affordable.[2] The seller traffic index has remained below 50 since September 2008, indicating that seller activity remains generally “weak.” Relatively strong demand amid tight supply has pushed prices up to increasingly less affordable levels.

First-time homebuyers accounted for 31 percent of sales, essentially unchanged from its levels one year ago and the previous month. Purchases for investment purposes made up 13 percent of sales, and cash sales accounted for 22 percent of sales, both substantially unchanged from the levels one year ago and the previous month. Distressed properties were five percent of sales, down from seven percent last year. Nationally, amid tight supply, half of properties that sold in August 2016 were on the market for 36 days or less compared to 47 days one year ago.

Very low supply, declining affordability, appraisal issues, and lender processing delays were reported as the key issues affecting sales. Still, most respondents were confident about the outlook for the next six months across all property types, with the six-month confidence indices for single-family homes and townhomes registering over 50. With home prices increasingly becoming less affordable, respondents typically expected prices to increase at a slower pace of 3.1 percent in the next 12 months.

[1] An index greater than 50 indicates the number of respondents who reported “strong” (index=100) outnumbered those who reported “weak” (index=0). An index equal to 50 indicates an equal number of respondents reporting “strong” and “weak” market conditions. The index is not adjusted for seasonality effects.

[2] An index greater than 50 indicates the number of respondents who reported “strong” (index=100) outnumbered those who reported “weak” (index=0). An index equal to 50 indicates an equal number of respondents reporting “strong” and “weak” market conditions. The index is not adjusted for seasonality effects.

Single-Family Homes Are a Buyer’s Best Friend

Fri, 09/23/2016 - 14:44

Overwhelmingly, home buyers have purchased detached single-family homes more than any other type of home in the last 35 years. Since 1981, the Profile of Home Buyers and Sellers has collected data on the types of homes purchased throughout the three-and-a-half decades. Consistently, 74 to 88 percent of home buyers purchased single-family homes each year. Home buyers purchased townhomes and condos each at roughly 10 percent of the time and other types of homes less frequently.

In 1981, 76 percent of home buyers bought detached single-family homes, eight percent bought townhomes, and 16 percent bought condos. By comparison in 2015, 83 percent bought detached single-family homes, seven percent bought townhomes, and three percent bought condos.

Single-family homes were the top home choice in 1985 at 88 percent, and again at 87 percent in 2002 and 2004. From 1985 to 2002, four in five buyers steadily purchased single-family homes. From 2005 to 2012, three in four buyers bought single-family homes. Townhome purchases hovered around nine percent for the majority of the 1990s and early 2000s and then dropped one to two points since 2008. Condo purchases were most popular from 1997 to 2007 at 11 percent for several years, but also dropped a few percentage points starting in 2008. By 2015, only three percent of homes purchased were condos. Other home types started gaining popularity in 2003 at two percent and have grown in market share to seven percent by 2015.

To follow this series as we discuss the findings of 35 years of profile data, check out the hashtag #NARHBSat35 on your social channels. NAR Research will be releasing trend line data since 1981 to celebrate 35 years of home buyer and seller demographic research.

REALTORS® Reported “Weak” Supply Amid “Strong” Demand in August 2016

Fri, 09/23/2016 - 14:38

In the monthly REALTORS® Confidence Index Survey, the National Association of REALTORS® (NAR) asks members How do you rate the past month’s traffic in the neighborhood(s) or area(s) where you make most of your sales?” NAR compiles the responses on buyer traffic into a REALTORS® Buyer Traffic Index and the responses on seller traffic into a REALTORS® Seller Traffic Index.

The REALTORS® Buyer Traffic Index[1] registered at 61(64 in July 2016; 60 in August 2015), indicating that more respondents viewed buyer traffic conditions as “strong” rather than “weak,” according to the August 2016 REALTORS® Confidence Index Survey Report. The index is essentially unchanged compared to one year ago, but it is lower compared to the previous month, possibly due to seasonal slowdown and the impact of higher prices on demand.

Meanwhile, supply conditions remained, by and large, tight in many areas. The REALTORS® Seller Traffic Index registered at 44 (45 in July 2016; 45 in August 2015), indicating that more respondents viewed seller traffic conditions as “weak” rather than “strong.”

The maps below show the condition of buyer and seller traffic using data collected from June‒August 2016. Local conditions vary in each state, but the REALTORS® Buyer Traffic Index indicates that markets were “moderate” to “very strong” in all states except in Wyoming, North Dakota, and Connecticut where buyer traffic was “weak.”[2]

Seller traffic was “weak” in many states, measured by the REALTORS® Seller Traffic Index.[3] However, seller traffic was “moderate” to “strong” in several states, including those that had benefited from the oil boom but are now facing slower job growth because of lingering lower oil and natural resources prices—Alaska, Montana, North Dakota, New Mexico, Texas, and Louisiana.

Employment conditions affect the demand and supply for housing. The chart that follows shows the change in non-farm employment in July 2016 from July 2015 by state. Non-farm employment contracted in the oil-producing states of North Dakota, Wyoming, Oklahoma, and Louisiana and increased only modestly in several other natural resources states in the Midwest and South.[4] The slower job growth and job cutbacks in these states are likely leading to more seller traffic and a shift to a buyer’s market.[5] Meanwhile, several other oil-states such as Utah, Colorado, Texas, and New Mexico have job growth near to or above the national average. Employment growth was strongest in Washington, Oregon, Idaho, Utah, Colorado, and Florida. Buyer traffic was “strong” to “very strong” in these states.

[1]The Buyer Traffic Index provides information on the level of homebuying demand or interest which may materialize as a contract to purchase or closed sale after two or three months.

[2] The index for each state is based on data for the last three months to increase the observations for each state. Small states such as AK, ND, SD, MT, VT, WY, WV, DE, and D.C., may have fewer than 30 observations. Respondents were asked “How do you rate the past month’s buyer traffic in the neighborhood(s) or area(s) where you make most of your sales?” Respondents rated conditions or expectations as “Strong (100),” “Moderate (50),” and “Weak (0).” The responses are compiled into a diffusion index. For graphical purposes, index values 25 and lower are labeled “Very weak,” values greater than 25 to 48 are labeled “Weak,” values greater than 48 to 52 are labeled “Moderate,” values greater than 52 to 75 are labeled “Strong,” and values greater than 76 are labeled “Very strong.”

[3] Respondents were asked “How do you rate the past month’s seller traffic in the neighborhood(s) or area(s) where you make most of your sales?” Respondents rated conditions or expectations as “Strong (100),” “Moderate (50),” and “Weak (0).” The responses are compiled into a diffusion index. A value of 50 indicates a balance of respondents who reported “Strong “and “Weak” markets. For graphical purposes, index values 25 and lower are labeled “Very weak,” values greater than 25 to 48 are labeled “Weak,” values greater than 48 to 52 are labeled “Moderate,” values greater than 52 to 75 are labeled “Strong,” and values greater than 76 are labeled “Very strong.”

[4] For a review of states in which oil has an outsized economic impact, see this blog: http://economistsoutlook.blogs.realtor.org/2016/03/21/is-california-an-oil-producing-state/

[5] https://communityimpact.com/houston/the-woodlands/economic-development/2015/12/09/falling-oil-prices-starting-to-affect-woodlands-economy/http://www.theatlantic.com/business/archive/2015/06/north-dakota-oil-boom-bust/396620/

August 2016 Existing-Home Sales

Fri, 09/23/2016 - 10:31
  • NAR released a summary of existing-home sales data showing that housing market activity slowed for the second month in a row. August’s existing-home sales slid to the 5.33 million seasonally adjusted annual rate and existing-home sales are modestly up 0.8 percent from a year ago.
  •  The national median existing-home price for all housing types was $240,200 in August, up 5.1 percent from a year ago.
  • Regionally, all four regions showed growth in prices from a year ago, with the West leading at 9.2 percent. The South had an increase of 6.7 percent, and the Midwest followed with a 5.5 percent increase. The Northeast had the smallest gain of 0.8 percent from August 2015.
  • From July, three regions experienced declines in sales with the Northeast being the only region to have an increase of 6.1 percent. The Northeast is benefiting from sufficient inventory and that is helping tame price growth. The South had the biggest regional dip in sales with decline of 2.7 percent. The West had a decline of 1.6 percent while the sales in the Midwest declined 0.8 percent.
  • All regions showed a modest gain in sales from a year ago except the Northeast where sales remained flat. The South led all regions and had the biggest gain of 0.9 percent. The Midwest and the West both had gains of 0.8 percent. The South also leads all regions in percentage of national sales at 40.5 percent while the Northeast has the smallest share at 13.1 percent.
  • August’s inventory figures are down 3.3 percent from last month to 2.04 million homes for sale and the level remains below historical averages. Inventories are considerably down 10.1 percent from a year ago. It will take 4.6 months to move the current level of inventory at the current sales pace. It takes approximately 36 days for a home to go from listing to a contract in the current housing market, down from 47 days a year ago.
  • Single family sales decreased 2.3 percent while condos increased significantly 10.5 percent compared to last month. Single family home sales inclined 0.6 percent and condo sales are also up 1.6 percent from a year ago. Both single family and condos had an increase in price with single family up 5.3 percent and condos up 3.7 percent from August 2015.



Growth Forecast for REALTOR® Firms

Thu, 09/22/2016 - 09:25

Let’s take a snap shot into the minds of REALTOR® firms and their projection for business in the near-term from the 2016 Profile of Real Estate Firms. First, we know that roughly half (47 percent) of all firms are actively recruiting agents in 2016, up from 44 percent in 2015. Hiring is always an indicator of industry health. At the peak, 88 percent of large firms with four or more offices are actively recruiting. Firms cited that their main reason for recruitment (at 86 percent) is that they are experiencing growth in their primary business area. Another reason for recruitment, at roughly two-thirds (64 percent), could be that firms have the expectation of profitability to increase in the next year—from mid-2016 to mid-2017—which is consistent across residential and commercial firms and grows to 72 percent for larger firms with multiple offices.


Firms’ view of their competition is always fascinating. By and large, firms expect the level of competition to stay the same from all angles, meaning traditional brick and mortar firms, virtual firms, and non-traditional market participants. Forty-six percent of firms cited that competition was expected to increase from virtual firms and 43 percent expected an increase from non-traditional market participants, which is not a surprise and is consistent with 2015.

The biggest challenges firms face are profitability, keeping up with technology, and maintaining sufficient inventory. New challenges that emerged were TRID or TILA-RESPA Integrated Disclosure (17 percent) and wire fraud (12 percent). However, competition from traditional brick and mortar firms, virtual firms, and non-traditional market participants all moved down a few percentage points in 2016 compared to last year. The recruitment of younger agents, agent retention, and local or regional economic conditions all moved up by a few points as expected challenges in the next two years.

For the first time on the 2016 survey, we asked if firms had an exit plan in place, as in if they have a backup strategy in case they want to change industries due to economic shifts, or simply if they plan to retire and want to pass the torch. Thirty-eight percent of firms said they did in fact have an exit strategy while 43 percent said they did not plan on retiring or leaving the business.

Trading Up and Trading Down: The Times Are A Changin’

Wed, 09/21/2016 - 10:51

Repeat home buyers have the option of trading up for a bigger home, purchasing a home similar in size, and trading down to a smaller home. This change in home size often corresponds to life changes. For instance, empty nesters will often trade down to a smaller home when children leave and they want less space to maintain. Young families that expect more children will often trade up in size to accommodate more people under one roof.

The Profile of Home Buyers and Sellers has collected data since 2003 on the changing size of homes purchased by home buyers. Size often corresponds to home price. Similar in fashion, the Profile of Home Buyers and Sellers has also tracked the changing price of homes purchased by home buyers since 2008.

In 2015, only 42 percent of home buyers traded up in the size of their home. Twelve years prior in 2003, home buyers were more frequently trading up in size at 55 percent. Since 2009, where 54 percent of home buyers traded up, we see a steady decline in the number of home buyers trading up. In 2004, we saw a peak in home buyers trading up to a larger home at 57 percent, and in 2014 we saw a low in home buyers trading up at 40 percent.

Also in 2015, we see a peak in home buyers trading down in size at 31 percent, the largest segment that traded down in the last twelve years. In 2005, roughly a decade prior, home buyers trading down was at its smallest group with just 20 percent of all buyers. Since 2011, the share of home buyers trading down in size has steadily increased.

As for repeat buyers that purchased the same size home, in 2003 the share of this group was only 16 percent—the lowest in the time series. From 2004 to 2012, the share of buyers purchasing the same size of home is greater each year than the share of those who traded down. In 2013 and 2015, repeat buyers that traded down surpassed those buying a home similar in size.


In terms of home price, there has been a steady increase in home buyers trading down since 2008 when we started collecting the data. In 2008, just 22 percent traded down in price and 54 percent trade up. By 2015, buyers trading down in price increased to 30 percent and buyers trading up decreased to 47 percent. The share of repeat home buyers that bought roughly the same price in home has been steady at 23 to 25 percent from 2008 to 2015, with the exception of 2010 when only 20 percent bought at the same price.

To follow this series as we discuss the findings of 35 years of profile data, check out the hashtag #NARHBSat35 on your social channels. NAR Research will be releasing trend line data since 1981 to celebrate 35 years of home buyer and seller demographic research.

In Real Estate, Firms Are A Family Affair

Tue, 09/20/2016 - 15:46

In the 2016 Profile of Real Estate Firms, we surveyed our members for the first time on to learn if firms were family-run businesses and what type of family relationships exists within the firm. Members cited that 50 percent of all firms had some type of family relationship and seven percent of those firms were completely family-run where everyone was related.

Family relationships grow stronger as the size of firms increase; 68 percent of firms with four or more offices cited they have some type of family relationship. The most common family structure in the firm was a spouse or partner (62 percent), followed by parent-child (55 percent), siblings (18 percent), and grandparent-grandchild (four percent). The spouse or partner relationship was strongest in smaller, one-office firms and the parent-child and sibling relationships grew with larger firms that had multiple offices.

By and large, firms encourage its members to volunteer in the local community (82 percent), at local associations of REALTORS® (48 percent), at state associations of REALTORS® (28 percent), and at the National Association of REALTORS® (19 percent).


Construction Gap Improves, but Remains Wide

Mon, 09/19/2016 - 12:05


  • Despite strong gains in 2015, sluggish construction persists
  • Supply constraints are wide spread
  • Prices are likely to continue to rise in markets with inadequate supply in relation to job creation


While the homeownership rate tumbled in the wake of the great recession and millions of owners shifted to rentership, the total population and number of families continued to expand along with the need to house them. Construction has been limited and focused on the upper-end of the market. Without an expansion of the total stock of homes, prices and rents will continue to rise at the expense of affordability.

In normal times the supply of homes for sale is driven by two sources: new construction and existing homes brought to the market for sale. In the aftermath of the great recession foreclosures and short sales emerged as an important channel for inventory but have receded. Negative equity and student debt now keep some owners from bringing existing stock to the market, but limited inventory also acts as a disincentive for some would-be sellers. As the market normalizes, the emphasis on traditional channels of inventory, new construction in particular, has grown.


The relationship between employment and construction can provide insights to the extent of the shortage.  Historically, there is a strong relationship between new construction and the number of newly employed workers.  From 1990 to 2002 the US averaged 1.2 for total permits (single family and multi-family), or 1 permit for every 1.2 new workers. For single family permits this employment-to-permits (EP) ratio was 1.6.  Both of these ratios have been above their historic averages since 2012 and peaked in 2014.[1]  The total EP ratio fell from a high of 2.3 in 2014 to 2.0 in 2015 as strong single family permits growth outpaced steady improvements in new employment. The single-family EP ratio improved as well, from 3.7 to 3.4, but remains further from its long-term average.


This imbalance was widespread with 81.3 percent of the 171 metro areas tracked having a single family EP ratio greater than 1.6.  Furthermore, 36.3 percent of the markets had a ratio of 4.0 or higher.  When multi-family construction was included in the total, the distribution was not as extreme, but 52.9 percent had an EP ratio of 2.0 or higher and 29.1 percent were bunched between a ratio of 2.0 and 3.0 indicating an imbalance.

Based on the EP ratio, the gap between the current level of permits and one that would achieve the historic EP ratio or strike a balance between employment and permits can be calculated.[2]  Markets with the biggest absolute shortage of permits tend to be large markets with strong employment and price growth. New York led the list followed by Dallas and San Francisco.  California dominated the top 10 list with three markets including San Jose and San Diego.

The list was also ranked by the 3-year employment to permits ratio (not pictured here).  Trenton (NJ) topped that list with a ratio of 25.1, up from 22.3 in 2014, which resulted from strong employment gains and minimal single family permitting.  Three California markets follow Trenton, but other smaller markets made the list including Springfield (MA) and two Michigan markets in Ann Arbor and Grand Rapids.  Roughly a dozen markets were in balance with ratios near 1.6 including Pensacola, Huntsville, and Columbia (MO).

Supply shortages and price growth have continued through 2016. Reports of bidding wars are common while stories of frustrated would-be home buyers abound. Construction analysts forecast continued improvement and media reports point to gains in the much needed entry-level portion of the market, but builders face headwinds from financing issues, high labor costs, regulations, and limited buildable land.  A decline in negative equity that unlocks existing inventory will help, but the only way to house an expanding workforce and population is through construction.


For the full list of Single Family ranking by 3-year employment-to-permits ratio please click here >



[1] To remove annual volatility, a 3-year moving average was calculated.

[2] R = historical average of permits/employment ratio

Inventory balance (excess/shortage) = actual employment / R – actual permits

Market Snapshot: Second Quarter 2016

Wed, 09/14/2016 - 08:18

NAR Research produces a series of Local Market Reports (LMRs) which provide insights into the fundamentals and direction of the nation’s largest metropolitan housing markets. Each report evaluates a number of factors affecting home prices, including:

  • The health of the local job market
  • Foreclosure rates
  • Housing inventory
  • Debt-to-income and mortgage-servicing-costs-to-income ratios


The reports for the second quarter of 2016 were released a couple of weeks ago. The visualization below provides a snapshot of these reports. For more detailed data, please visit our Local Market Reports page.



Home Buyer and Seller Race and Ethnicity Trends

Tue, 09/13/2016 - 15:21

Since 1997, respondents of the Profile of Home Buyers and Sellers have had the option to choose as many or as few options for how they racially and ethnically identify themselves. Using this data, the ethnic and racial diversity of home buyers and sellers can be seen on a trending basis.

The initial tracking of race and ethnicity of home buyers started in 1997, and showed that among recent home buyers 90 percent identified as White/Caucasian, eight percent identified as Hispanic/Latino, five percent identified Black/African-American, four percent identified as Asian/Pacific Islander, and one percent identified as other. Skipping ahead to 2003 all race/ethnicity categories remain consistent going to 2015.  While home buyers remain predominantly White/Caucasian, the other categories each have peak highs. Between 1997 and 2015, each race/ethnicity had peak highs in the following years:

  • White/Caucasian: 1997, 90%
  • Black/African-American: 2005-2007, 7%
  • Hispanic/Latino: 1997, 8%
  • Asian/Pacific Islander: 2006, 6%
  • Other: 2003 and 2014, 3%

Looking at first-time home buyers, the race and ethnicities of non-White/Caucasian buyers is higher than among all buyers. Between 2003 and 2015, the percentage of Black/African-American and Hispanic/Latino first-time home buyers both ranged from six to 11 percent. The percentage of Asian/Pacific Islander first-time home buyers ranged from five to eight percent, and White/Caucasian first-time home buyers ranged from 73 to 80 percent. Between 2003 and 2015, first-time buyers in each race/ethnicity had peak highs in the following years:

  • White/Caucasian: 2013, 80%
  • Black/African-American: 2006, 11%
  • Hispanic/Latino: 2011, 11%
  • Asian/Pacific Islander: 2014, 8%
  • Other: 2003, 4%


For more trend lines from the past 35 years of the Profile of Home Buyers and Sellers, follow along using #NARHBSat35.

Settlement Delays Edge Upward

Tue, 09/13/2016 - 14:44

Delays in the time-to-close, the time from when a listing goes under contract to settlement of the deal, rose for the second consecutive month. Delays are measured by comparing the time-to-close this year with the same time frame a year earlier so as to eliminate seasonality. The average delay in time-to-close rose from 3.0 days in July to 3.9 days in August. This is the highest level of delays since January.

Compared to last year, the share of contracts closing in fewer than 30 days fell from 29.7 percent to 20.9 percent. The largest shift was to the portion of the market that takes greater than 45 days to settle, which rose from 36.4 percent to 43.7 percent.

While the jump in delays in late 2015 and lingering effects through the spring and summer were due to TRID, more recent increases are likely Brexit related. The sharp drop in mortgage rates boosted refinancing activity which taxed lenders’ ability to process transactions. Appraisal related delays may have played a role as anecdotes of limited qualified appraisers in the face of high application volume caused delays. Brexit and volume related delays will likely ebb in the weeks and months ahead leaving a better picture of the lingering regulatory-related delays the impact of the CFPB’s recent efforts to ameliorate them.

Comparison of Seasonally and Not Seasonally Adjusted Existing-Home Sales

Mon, 09/12/2016 - 13:38

One problem with interpreting data over time is that many data exhibits movements which recur during the same period each year. This is why it is normal to report in the news seasonally adjusted data figures to reveal the underlying trend in the market. The visualization above shows both seasonally and not seasonally adjusted existing home sales in the past three years. Compare the month-to-month percentage change for both types of home sales.

Taking a closer look at the percentage change from the previous month, it looks that the largest gaps between the two types occur in January and March. For instance, in January 2016, seasonally adjusted home sales increased 0.4% from December while not seasonally adjusted sales decreased 30.7%. This shows that once the seasonal influence is removed from the data, existing home sales actually increased in January.  The fact that holiday celebrations diminish home shopping in November and December that leads to fewer sales in January is one of the reasons which make seasonally adjusted figures different than not seasonally adjusted data, and with the help of seasonally adjusted data, market analysts and policy makers can avoid overreacting to seasonal fluctuations in the data. Seasoned REALTORS®, however, will know that their business normally slows down at the end and beginning of the year for seasonal reasons and will adjust their planning accordingly while new REALTORS® will benefit from reviewing trends in the unadjusted data to learn about typical busy and less busy seasons.

In contrast with January and March, these gaps between adjusted and unadjusted data are small in October and February. It seems that there is not any seasonal component in the data series in these two months. Thus, both datasets exhibit the same movements in these months.

July 2016 Housing Affordability Index

Mon, 09/12/2016 - 10:05

At the national level, housing affordability is up from a year ago for the first time since February of 2015 when it improved 2.0 percent. Mortgage rates are 3.77 this July, which is the lowest rate since June 2013 when rates fell to 3.67.

  • Housing affordability increased from a year ago in July pushing the index up 1.7 percent from 154.5 to 157.1. The median sales price for a single family home sold in July in the US was $246,000 up 5.4 percent from a year ago.
  • Nationally, mortgage rates were down 42 basis points from one year ago (one percentage point equals 100 basis points) while incomes modestly rose 2.0 percent.
  • The South had the biggest increase in price at 6.7 percent. The West had an increase of 6.0 percent while the Midwest had a 5.1 percent gain in price. The Northeast had the smallest increase of 3.5 percent.
  • Regionally, all regions saw increases in affordability from a year ago. The West had the biggest increase of 2.6 percent closely followed by the Northeast with an increase of 2.5 percent. The Midwest had a modest gain in affordability of 1.1 percent while the South had the smallest gain of 0.7 percent.
  • By region, affordability is up in all regions from last month. The Midwest (3.2 percent) had the biggest increase. The West and South each had an increase of 2.9 percent. The Northeast had the smallest increase in affordability of 0.5 percent.
  • Despite month to month changes, the most affordable region is the Midwest where the index is 194.8. The least affordable region remains the West where the index is 117.5.  For comparison, the index is 162.3 in the South, 155.4 in the Northeast.
  • Mortgage applications picked up this week and rates are historically low. Purchase mortgage applications are also currently up this week. New home sales are up but inventory is still too low to relieve the pressure of home price growth. Median family incomes continue to lag behind the pace of increasing home prices.
  • What does housing affordability look like in your market? View the full data release here.
  • The Housing Affordability Index calculation assumes a 20 percent down payment and a 25 percent qualifying ratio (principal and interest payment to income). See further details on the methodology and assumptions behind the calculation here.

Twenty Five Years of Customer Satisfaction

Sun, 09/11/2016 - 22:03

Common Sense- a happy customer is a repeat customer or refers new business.  The Profile of Home Buyers and Sellers, which began 35 years ago, has been collecting information on satisfaction of an agent from the seller’s perspective since 1989 and from the buyer’s perspective since 1995. Although the basic question of customer satisfaction with their agent has evolved over the past twenty years, the definitive measure of customer satisfaction lies in the question “would you use the same real estate professional again in the future?”. In 2004, the survey question was expanded to ask if you would use the same agent again or recommend the agent to others. Throughout the past 25 years the evolution of this question has changed, but consistently two-thirds of all respondents have been satisfied with their agent.

Since collecting data on satisfaction of agent, typically 67% of buyers would definitely use the same real estate agent again or recommend the agent. Within the home seller group, satisfaction was typically measured at 65 percent.

To follow along with this series as we discuss the findings of 35 years’ worth of Profile data, check out the hashtag #NARHBSat35 on your social channels.  NAR Research will be releasing trend line data since 1981 to celebrate 35 years of home buyer and seller demographic research.


Historical Low Time on Market to Sell a Home

Wed, 09/07/2016 - 10:38

Since 1987, NAR’s Profile of Home Buyers and Sellers has tracked the number of weeks on the market a home is listed.

In 2014 and 2015, homes sold on the market at a median of four weeks. This is the shortest time homes have sold on the market in the last twenty years. In 2001, 2004, and 2005 at the height of the housing market, homes also sold within a month of being listed. The last two years—2014 and 2015—the time on market declined due to a lack of inventory for available homes.

As the market downturn began in parts of the country, the median time on market for homes started to creep up to six weeks and later to eight weeks in 2006 and 2008 respectively. More distressed homes were put on the market and there were fewer buyers, pushing the time up. By 2009, homes sold at a median of 10 weeks. This was partly attributed to the U.S. government’s cash infusion issued to first-time home buyers in the form of a tax credit, spurring more buyers into the market and pushing up demand.

In the consecutive two years in 2010 and 2011, the median weeks on market drops back down eight and nine weeks respectively as investors jumped in to snatch up cheaper properties, often competing with first-time home buyers. Time on market then hit a peak in 2012 at eleven weeks. This number falls drastically to five weeks the following year in 2013, indicating tight inventory, tight credit availability, and a lack of new construction of homes to keep up with demand.

To follow this series as we discuss the findings of 35 years of profile data, check out the hashtag #NARHBSat35 on your social channels. NAR Research will be releasing trend line data since 1981 to celebrate 35 years of home buyer and seller demographic research.

State Job Growth Comparisons, July 2016

Wed, 09/07/2016 - 08:53

Uses of Home Equity Loans Show Benefits of Homeowership

Tue, 09/06/2016 - 15:48

According to the Census Bureau’s latest data, the U.S. homeownership rate edged lower to 63.1 percent in the second quarter of 2016, with the homeownership rates falling across all age groups. [1] This is the lowest rate recorded since 1980, based on this quarterly survey.[2] The declining trend in homeownership is disheartening because homeownership is very much a part of the American dream. According to NAR’s 2015 Q4 HOME Survey, 87 percent of U.S. households view homeownership as part of the American Dream, and among renters,  83 percent want to own a home in the future.[3]

What are the financial benefits of homeownership? One way to answer this is to look at how homeowners use their home equity gains. According to the February 2016 Survey of Consumer Expectations of the Federal Reserve Bank of New York (FRBNY)[4], respondents who availed of a home equity loan or a line of credit used the loan for activities relating to home improvement, paying down debt, for business and financial investments, and education financing—all of which enable the current homeowner and their children to move up the economic ladder and enjoy a better quality of life. According to the latest survey, respondents used the loan for home improvement, which can add further value to the property (50.5%); to help pay down other debt such as credit card, auto loan, and medical bills (46.6%); to pay for college/education (9.7%); to make a downpayment on a second home or investment property (6.3%), to make other financial investments (5.5%) or invest in a business (1.7%).  About six percent use the equity gain for vacation or for regular living expenses, which can be viewed as “consumption spending”. However, the FRBNY survey seems to indicate that most borrowers of home equity loans or lines of credit are responsibly using home equity credit for activities that improve their long-term financial condition or that enable the homeowner to tap the money when it is needed the most (e.g., help a family member).


Home equity gains not only help the current homeowner, but it also appears to raise the income of homeowner’s children as adults. A study by the Federal Reserve Bank of Boston economists Dr. Daniel Cooper and Dr. Maria Jose Luengo-Prado which was presented at a REALTOR® University Speaker Series found that for every 10 percent gain in home prices, the income of homeowner’s children as adults increases by nine percent (relative to case where home prices have not increased), while the income of renters’ children as adults fall by 15 percent.[5]

The benefits of homeownership go beyond the financial aspects. In fact, according to the NAR’s 2015 Q4 HOME Survey, the primary reason for owning a property is less tied to it being a “financial investment” than as a “home” to raise a family in  a stable environment.  According to NAR’s survey, the primary reason pertains to “lifestyle considerations such as getting married, starting a family, or retiring” (35 percent of homebuyers). Another major reason is the  “desire to settle down in one location” (18 percent of homebuyers). The latter may be related to the need for parents to provide a stable environment for their children to thrive socially and academically. Indeed, there is much evidence that residential instability correlates with lower educational and social development among.[6]  “Improvement  in financial situation” was cited as the primary  reason by 15 percent of homebuyers.

In short, the dream of homeownership is one that a majority of households desire because homeownership is viewed as a way to establish and raise one’s family in a stable and safe environment. The responsible use of equity gains from homeownership provides a source of income and wealth that can enable the current homeowner and one’s children to move up the economic ladder of opportunity and success.

[1] Thanks to Danielle Hale, Managing Director, Housing Statistics, for her review of this blog. All errors are solely the author’s.

[2] The U.S. Census Bureau’s quarterly estimate of the homeownership rate based on the Current Population Survey and Housing Vacancy Survey is the widely quoted data. Other annual estimates are also available such as from the Census’s American Community Survey.

[3] National Association of REALTORS®, 2015 Q4 Housing Opportunities and Market Experience (HOME) Survey,http://www.realtor.org/reports/2015-q4-homeownership-opportunities-and-market-experience-home-survey s

[4] 2016 Survey of Consumer Expectations-Housing Survey, Federal Reserve Board of New York. https://www.newyorkfed.org/medialibrary/interactives/sce/sce/downloads/data/FRBNY_SCE_Housing_chartpacket2016.pdf

[5] Dr. Daniel Cooper’s presentation can be found at http://economistsoutlook.blogs.realtor.org/2016/08/08/house-price-growth-when-children-are-teenagers-a-path-to-higher-earnings-a-realtor-university-speaker-series-presentation/

[6] Sandstrom, Heather and Huerta, Sandra,“The Negative Effects of Instability on Child Development,” Low-Income Working Families Discussion Paper 3, Urban Institute, September 2013.