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Updated: 34 min 3 sec ago

A More Detailed Examination of Recent Case-Shiller Price Data

Wed, 06/25/2014 - 14:24
  • Earlier this week, we examined the FHFA and Case-Shiller releases focusing on national data trends. Today, we’ll dig a bit deeper to look at more local data at the regional and city or MSA level.
  • Monthly FHFA releases data at the Census division level and quarterly it releases state and metro area data. Case-Shiller offers data on 20-cities monthly. Both of these sources confirm the trend seen in NAR measures.
  • At the regional level, the most robust home price gains from a year ago were in the West. NAR reported a price change of 8.2% from a year earlier in both April and in May in the West. According to FHFA, year-over-year prices in April 2014 rose 10.7 percent in the Pacific division (which includes Hawaii, Alaska, Washington, Oregon, and California) and 7.5 percent in the Mountain division (which includes Montana, Idaho, Wyoming, Nevada, Utah, Colorado, Arizona, and New Mexico).
  • Likewise, NAR data showed the smallest price change from a year ago in the Northeast (1.0% decline for the year ending in April and 1.9% decline for the year ending in May), and FHFA showed a similar pattern. Prices rose 3.0 percent in New England (Maine, New Hampshire, Vermont, Massachusetts, Rhode Island, Connecticut) and 1.7 percent in the Middle Atlantic states (New York, New Jersey, Pennsylvania) from April one year ago.
  • Among cities, Case-Shiller reported the biggest year-over-year gains in Las Vegas and San Francisco. Each had more than 18% year-over-year gains. San Diego showed the third strongest year-over-year growth followed closely by Detroit. Each of these cities saw prices rise by 15 percent or more from a year ago. The smallest gains in Case-Shiller’s cities were Cleveland at 2.7 percent, Charlotte at 4.4 percent and New York at 5.4 percent.

REALTORS® Confidence Eases in May

Tue, 06/24/2014 - 13:34

Confidence about current market conditions was essentially unchanged in May 2014 compared to April, according to the May 2014 REALTORS® Confidence Index. An index above 50 indicates that more REALTORS® view housing conditions as “strong” compared to those who view it as “moderate” or “weak” [1].

Confidence about the outlook for the next six months dipped across all markets in May compared to April. Continued tightness in supply (although improving), difficult credit conditions, and the lackluster growth in income and savings were reported to be constraining sales. REALTORS® also commented on the difficulty of obtaining mortgage financing for condominiums which are typically the starter homes for first-time buyers due to FHA approval issues.

[1] An index of 50 delineates “moderate” conditions and indicates a balance of respondents having “weak”(index=0) and “strong” (index=100) expectations or all respondents having moderate (=50) expectations. The index is calculated as a weighted average using the share of respondents for each index as weights. The index is not adjusted for seasonality effects.

Housing Price Indices: Latest Data Comparison

Tue, 06/24/2014 - 12:56
  • Yesterday NAR released existing home sales and median home price information that showed gains of 5.1 percent in prices in May 2014 compared to May 2013, the same pace of year over year growth as in April and notably slower than double-digit trends in summer/fall 2013.
  • Today, both the FHFA and S&P/Case-Shiller released their housing price index data for April.  Both data series showed continued gains in home prices with some deceleration suggesting that the pace of home price increase should fall back into a more normal range in the next few months as NAR data has indicated.
  • Case-Shiller reported gains of 10.8 percent each for the 10- and 20-city indexes in the year ending April 2014, while FHFA reported home price gains of 5.9 percent for the same period.
  • NAR reports the median price of all homes that have sold while FHFA and Case-Shiller report the results of a weighted repeat-sales index.  Because home sales among higher priced properties have been growing more than among lower price tiers, the NAR median price had risen by more than the weighted repeat sales index—which computes price change based on repeat sales of the same property.
  • The reason Case-Shiller’s reported price growth now exceeds NAR’s is likely a result of the data lag.   Case Shiller uses public records data which has a reporting lag.  To deal with the lag, Case Shiller data is based on a 3 month moving average, so reported April prices include information from repeat transactions closed in February, March, and April.  For this reason, the changes in the NAR median price tend to lead Case Shiller.
  • FHFA sources data primarily from Fannie and Freddie mortgages, transactions using prime conventional financing, and misses out on cash transactions as well as jumbo, subprime, and government backed transactions such as those using VA or FHA financing.

New Home Sales in May

Tue, 06/24/2014 - 12:44
  • Sales of newly constructed homes soared to the highest level in six years. In May, sales jumped 19 percent to an annualized pace of 504,000 units.
  • Rising sales are a reflection of pent-up demand and indicate further increases in new home construction. The current inventory level is tight, at only 4.5 months supply.
  • The median price of a newly constructed home is now at $282,000, up 6.9 percent from one year ago. The new home price still carries a large premium over a typical existing home price.
  • Whatever is being built is moving swiftly. On average it takes 3.3 months to lead to a sale. A few years ago, it took on average over a year to find a buyer.
  • The outlook is for homebuilders to keep moving dirt at an accelerated pace. New home sales will grow by 17 percent this year and another 40 percent in 2015. The dominant existing home sales market, which makes up over 90 percent of all home sales, will see a modest reduction in sales this year, and then rise 5 to 10 percent next year. Job creation and pent-up demand will overpower the impact of modestly higher mortgage rates that is anticipated next year.
  • New home sales operate on a first-come, last-in basis in some markets. That is, once a community is developed, the existing residents will fight tooth-and-nail to prevent further developments. One can witness that in places like Boulder, CO and San Francisco. The homeowners there, with limited supply, will enjoy higher home prices. Since not everyone in the community can be homeowners, the renters will feel left out. The wealth gap between the rich and the poor as a result tends to be widest in these hard-to-build new home cities.

REALTORS® Confidence Index Survey: May 2014 Highlights

Mon, 06/23/2014 - 15:22

The REALTORS® Confidence Index (RCI) Report provides monthly information about market conditions and expectations, buyer/seller traffic, price trends, buyer profiles, and issues affecting real estate based on data collected in a monthly survey of REALTORS®:  see the May 2014 report at http://www.realtor.org/reports/realtors-confidence-index.

Broadly, the May 2014 survey indicates that REALTOR®  confidence in May concerning current conditions was essentially flat, while registering a slight dip in confidence about the outlook for the next 6 months across all markets. Continued tightness in supply, although improving, difficult credit conditions, and the lackluster growth in income and savings were reported to be constraining sales. Local conditions vary. 

The REALTOR® University Speaker Series

Fri, 06/20/2014 - 10:14

NAR Research, in conjunction with REALTOR® University, is pleased to present a free learning resource for REALTORS® and life-long learners alike.  The REALTOR® University Speaker Series is a luncheon lecture series that is open to students, members, and the public.  Each month, an expert on housing or the economy is invited to speak at the REALTOR® building in Washington, DC.  For those that aren’t in DC, the series is also available on video.

The series covers a wide array of topics that agents and those who follow the housing industry alike will find informative.  Past topics have included long-term housing vacancies in the US and the implications for the housing market, a review of housing indices and their strengths and weaknesses, commercial real estate topics such as REITS, housing affordability programs, why traffic and commutes matter to homeowners, the power of metropolitan centers of innovation, and many more.  Guest speakers come from such distinguished institutions as the Federal Board of Governors, the Brookings Institute, NAREIT, and the National Housing Conference & Center for Housing Policy, among others.

Each lecture lasts between fifteen to thirty-five minutes and is delivered to a live audience one to two times a month.   We encourage you to continue your education on topics related to the housing industry by taking advantage of this resource.   As an example of one of our more popular topics, here’s Lisa Sturtevant of the National Housing Conference & Center for Housing Policy discussing their Paycheck-to-Paycheck tool >

The next Realtor® University Speaker Series lecture will take place on June 24th and feature Rolf Pendall of the Urban Institute on affordability and community development issues.  Click here for more information >

U.S. Cities Where Brazilians Looked for a Home in 2013

Fri, 06/20/2014 - 09:53

Which U.S. cities are of greatest interest to Brazilians searching for a house? NAR economists have created a City Search Index (CSI) ranking U.S. cities where Brazilians looked for a property in 2013. Topping the list for Brazilians seeking a home in the United States? Miami, Orlando, and Los Angeles.

The index is based on a count of actual house searches by potential buyers throughout the year as measured by traffic on realtor.com, NAR’s official property listing website. Realtor.com helps connect people with the content, tools and expertise they need to find their perfect home, including information on homes for sale; connections with REALTORS®; neighborhood, moving, and mortgage advice; and in terms of buying a home– how to “make it happen”.

New England Accounts for 82 Percent of Investor Cash Sales in 2014

Thu, 06/19/2014 - 08:07

Cash sales made up 32 percent of all sales, according to the April REALTORS® Confidence Index. However, for investors, cash clearly continued to provide an advantage, as 70 percent of investor purchases were made with cash.

When looking at the regional trends over the past five years, investor cash purchases have been especially targeted in the South Atlantic region, home to Florida, Georgia, North and South Carolina, Virginia and West Virginia. The five-year average investor cash purchases for the South Atlantic region stood at 77 percent as of April.

Investors were also closing deals with cash in the East North Central region—Illinois, Indiana, Michigan, Ohio and Wisconsin. The region’s share of cash purchases by investors was 74 percent during the 2010-14 period. The other regions where investor cash acquisitions comprised two thirds of transactions were East South Central and Mountain, which were tied at 70 percent, for the 5-year average.

Analyzing just the 2014 data, there are a few noticeable details. New England recorded the highest share of investor cash purchases, at 82 percent. The South Atlantic came in a close second, with 79 percent of investor cash purchases. East North Central was in third place, at 75 percent.

In the Pacific region, which has been a main target of investor acquisitions, cash sales made up only 61 percent of transactions during 2014. The figure represents the lowest share of investor cash deals for the region in the past five years.

Note: The states in each region are detailed below.
New England (CT, ME, MA, NH, RI, VT), Middle Atlantic (DC, DE, MD, NJ, NY, PA), East North Central (IL, IN, MI, OH, WI), West North Central (IA, KS, MN, MO, NE, ND, SD), South Atlantic (FL, GA, NC, SC, VA, WV), East South Central (AL, KY, MS, TN), West South Central (AR, LA, OK, TX), Mountain (AZ, CO, ID, MT, NM, NV, UT, WY), Pacific (AK, CA, HI, OR, WA).

Latest CPI (Consumer Price Inflation) Data

Tue, 06/17/2014 - 13:06
  • Consumer prices (CPI) increased 0.4 percent in May, marking the largest 1-month increase since February 2013. On a year-over-year basis, however, prices rose 2.1 percent, just above the Federal Reserve’s 2 percent inflation target.
  • While food and energy price changes were somewhat higher, data show that price increases were broadly spread. Core inflation—a measure that excludes energy and food prices—was up by 0.3 percent on the month, its largest increase since August 2011. Year-over-year this measure rose 2.0 percent, right in line with the Fed target.
  • While the Fed does not target this specific inflation measure, the factors driving the Fed’s preferred measure are the same, suggesting that the Fed is currently meeting its target. If this trend continues, expect a gradual taper followed by moderate increases in the Federal Funds interest rate. However, if inflation continues to accelerate, the Fed may have to taper more rapidly and begin rate hikes sooner.
  • The Federal Open Market Committee (FOMC) meets today and tomorrow; a statement and press conference will follow the conclusion of the meeting. The Fed has steadily reduced the size of its asset purchases, or “tapered”, by $10 billion per meeting since it began the program in December. Analysts expect the taper to continue in tomorrow’s announcement, but a larger than expected taper could be an indication that the FOMC is wary of the potential for inflation.
  • One of the big non-energy components of the CPI, the shelter index, rose 0.3 percent for the month and 2.9 percent for the year. This has a large effect on the overall index because shelter is a little more than 30 percent of the index.
  • Rent of primary residences—actual market rents paid by individuals who do not own the home they live in (pictured below)—rose 3.1 percent for the year ending in May 2014. When rents are rising, it becomes more attractive to own a home. Because the bulk of home ownership costs for someone with a 30-year fixed rate mortgage are fixed, even if rents are initially cheaper, potential buyers can expect rent costs to catch up to ownership costs.
  • A few other sub-components of the shelter index show interesting trends. Housing at School, excluding board (pictured below) shows a gradual decline, but this is just a decline in the rate of increase. In fact, for the year ending May 2014, the price of housing at school was still rising at a 3.2 percent rate—faster than that for rent of primary residences. In contrast, Other Lodging Away from Home Including Hotels/Motels (pictured below) shows a sharp uptick after some previous stability—a 5.2 percent gain for the year ending in May 2014. While the trend for hotel/motel pricing is more variable, it has seen smaller price gains than housing at school over the last 6 years with only a few exceptions—this month being one.

Two Year Change in Employment (by Metro Area)

Tue, 06/17/2014 - 10:22

Job creation and household formation are major drivers of the trend in home sales. Job creation has been strong but inconsistent over the last year. However, some areas have shown significant improvements.

Notably, several formerly distressed markets have shown strong gains in employment though their unemployment rates remain high. These include Reno, Las Vegas, Riverside, and Orlando. Supply issues have weighed on job creation in the local construction industries for several of these markets as has a sluggish recovery of mortgage finance sector jobs.

Tech markets like San Jose, Austin, San Diego, and San Francisco have done well as have the oil-boom areas of Fargo and Bismark. Grand Rapids has been a notable bright star in Michigan. Several markets in Florida have also posted steady improvements.

Where does your metro area stand? For more information on recent trends in your state, see the Local Market Reports for the first quarter of 2014.

Investors Remain Active in South Atlantic and Pacific Markets

Tue, 06/17/2014 - 07:43

Investors have been active participants in residential markets, especially after 2008. According to the April REALTORS® Confidence Index, 18 percent of respondents reported a sale to an investor. Taking a look over the past five years reveals that investors prefer specific regions of the country.

Data for the 2010-14 year-to-date period reveals that two regions tie for the top spot, having shown consistently high investor participation: the South Atlantic and the Pacific. Both regions average a 22 percent share of investors in the market. For the South Atlantic, 2014 figures are close to the five-year average (22%), whereas for the Pacific region, this year’s data shows a decline from the five-year average (20%).

The third area with a high share of investors is the Mountain region, which records a 5-year average of 20 percent. This is consistent with the post-recession housing rebound, as these regions comprise states with the highest price swings and strongest investor interest (FL, AZ, NV, and CA).

When looking at just the 2014 data, there are a few noticeable details. The most active regions this year for investor sales are:

  • West South Central: 21.9 percent
  • South Atlantic: 21.8 percent
  • Pacific: 20.1 percent

In addition, for the Mountain region, which has experienced strong investor interest over the past five years, 2014 is experiencing a slowdown. Investor purchases comprised only 17 percent of sales this year, compared with the 20 percent average over five years.

Note: The states in each region are detailed below.
New England (CT, ME, MA, NH, RI, VT), Middle Atlantic (DC, DE, MD, NJ, NY, PA), East North Central (IL, IN, MI, OH, WI), West North Central (IA, KS, MN, MO, NE, ND, SD), South Atlantic (FL, GA, NC, SC, VA, WV), East South Central (AL, KY, MS, TN), West South Central (AR, LA, OK, TX), Mountain (AZ, CO, ID, MT, NM, NV, UT, WY), Pacific (AK, CA, HI, OR, WA).

Latest Look at the Budget Deficit

Mon, 06/16/2014 - 14:28
  • Tax revenues are pouring in to Washington. Through May, tax receipts were up 7.5 percent from one year ago. By September, the end of the current fiscal year, a cool $3 trillion could be collected – a record high – and a jump from $2.77 trillion collected last year.
  • Federal spending is down by 2 percent. The decline is driven by cutbacks to National Defense, which spent 6 percent less compared to the prior year.
  • Even with the massive revenue influx and spending reduction, the federal government will still have spent more than it collects. Total spending is projected to be $3.4 to 3.5 trillion, resulting in $400 to $500 billion in deficit. Because of the annual deficit, the overall cumulative debt still rises. However, due to a larger economy, the deficit as a percentage of GDP will be around 3%, the lowest since 2008.
  • Revenues from individual income tax are up by 3 percent from this time last year, while revenues from corporations are up by 16 percent. NAR estimates that about 80 to 90 percent of all personal income taxes are paid by homeowners. Therefore, any changes to mortgage interest deduction, as some in Congress are suggesting, will result in a heavier burden to those who already pay a huge bulk of taxes.
  • Revenue increases are coming from a steadily improving economy. More jobs mean more taxpayers. Also, some in the very high income bracket are now paying a higher tax rate.
  • With the deficit shrinking in relation to the GDP, there should be less pressure to take away the important tax benefits for real estate. Among those that were in discussion were the mortgage interest deduction, the capital gains tax exclusion from a home sale, the depreciation allowance for commercial real estate, and the 1031 exchange tax deferral. A healthy economy depends on a healthy real estate market. Let’s make sure elected officials do not dare go against the wishes of the people.
  • Very weird taxes have at times been introduced, going directly against the wishes of the people. During the brief period when England did not have a royal family, after the King’s decapitation by Oliver Cromwell, this extreme puritan dictator introduced a tax on cursing. But it was done on a graduated scale so that the poor English barely paid this tax while the high-income gentile class faced a huge fine. So the poor people could always relieve their feelings while the rich were left frustrated. Perhaps this is why the gentlemanly class of the British still appear stiff and display uptightness.

Latest Housing Affordability Index Data Release

Mon, 06/16/2014 - 08:52

At the national level, housing affordability is down for the month of April due to an increase in home prices while incomes and mortgage rates remain flat.

  • Housing affordability is down for the month of April as the median price for a single family home in the U.S. increased. The median single-family home price is $201,100, up 4.7 % from a year ago, but price gains are showing signs of slowing down.
  • Mortgage rates are up 70 basis points (one percentage point equals 100 basis points) from last year. Nationally, affordability is down from 187.0 in April 2013 to 167.8 in April 2014.
  • Income levels are up 2.3% from last year. Adjustments in lending practices could provide more opportunities for borrowers to find affordable housing. New home construction could help low inventory levels and slow price growth which may make buying more attractive than renting.
  • By region, affordability is up slightly from one month ago in the Northeast but down in the other three regions. The Midwest had the biggest drop in affordability. From one year ago, affordability is down in all regions. The West saw the biggest decline in affordability as a result of having the largest price gain at 8.7 %.
  • Interest rates are still historically low and confident consumers can still lock in a low mortgage rate while they offset increases in 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 (principle and interest payment to income). See further details on the methodology and assumptions behind the calculation here.

Existing Home Sales by Price Tier

Fri, 06/13/2014 - 08:21

Did You Know: More than 11% of homes sold had a sales price over $500,000, and sales growth was highest among homes in above-median-priced categories.

  • In spite of the price variation by region, when summed to the regional level the median sales price for all regions of the U.S. except the West falls into the $100,000 to $250,000 price range. The West is slightly outside of this range and the Northeast is near the upper edge.
  • The median price is the point at which the middle-priced home sold. By definition, half of homes in an area sold at a higher price and half of homes sold at a lower price than the median. But that’s just one part of the story. We can dig in deeper and look at the distribution of sales by price categories.
  • Doing so, we see that roughly a fifth of homes sold for less than $100,000 a year ago and that share shrank in April 2014 to 17.5 percent.
  • One year ago, homes sold at $500,000 or more were 10.8 percent of the market; they now comprise 11.6 percent of recently sold homes.

  • There are coincident reasons for this trend: 1) sales growth is highest among homes in the highest home price tiers, and 2) home sales are shrinking in the lowest price tier—most likely a result of limited inventory in this price range as would be expected in a housing market where prices are rising.
  • Sales in the lowest price tier fell by 12 percent nationally while sales in higher priced categories were up by 0 to 5 percent from April one year ago.
  • This trend of sales growth at the high end and weakness at the low end is showing signs of waning. It was first spotted in spring 2012 and gained momentum through 2013. Whereas once the increases in sales at the high-end were in double-digits, they have now slowed to mid-single digits.
  • Because indications are that inventories remain more plentiful in higher price tiers, we expect sales growth in the higher price tiers to continue to outpace that in the lower price tiers, but not by the vast margin that we saw in 2013. This is one factor that should contribute to more moderate increases in the median-price home in 2014.

Jobless Recovery: Labor Market Change Over Last Two Years

Thu, 06/12/2014 - 13:28

The national unemployment rate eased from 6.7% in March 2014 to 6.3% in April 2014. While that figure is strong at face value, the decline was in part due to the departure of 806,000 workers from the labor force. Fewer workers implies fewer people earning incomes, spending, and buying homes. The decline in unemployment hints at a psychological boost, but the decline in people searching for work is troubling.

Locally this trend can have a strong impact on the housing market, as the connection between a new job, the choice to form a household, and the choice or ability to purchase a home are closely linked. Many of the markets facing a jobless recovery are in smaller markets in the Northeast and Midwest. Pennsylvania and New York each share three markets in this group.

Where does your market stand? For more information on recent trends in your state, see the Local Market Reports for the first quarter of 2014.

Unemployment Insurance Claims Still at Normal Levels in Week Ending June 7

Thu, 06/12/2014 - 10:05
  • There were 317,000 claims for unemployment insurance in the week ending June 7. Claims slightly increased by 4,000 from the previous week’s level, but this can be considered as normal volatility. Initial claims for unemployment insurance [1] – a measure of existing jobs lost- have essentially normalized after peaking in 2009.

  • By state, for the week ending May 31 (latest available data), the largest increases in jobless claims were in Tennessee, Illinois, New Mexico and Washington. Meanwhile, the largest decreases in jobless claims were in California, New Jersey, Pennsylvania, Massachusetts and North Carolina.

  • NAR expects 2 to 2.5 million net new jobs this year and next based partly on the trends in unemployment claims.

[1] Claims filed under the regular state programs, seasonally adjusted

Cash Sales: 32 Percent of Sales in April 2014

Thu, 06/12/2014 - 08:03

Approximately 32 percent of respondents reported cash sales in April (33 percent in March), according to the latest REALTORS® Confidence Index. [1] Move-up buyers, investors, buyers of second homes, and foreign clients are more likely to pay cash. Baby boomers with accumulated equity gains are reported as trading down and also likely to pay cash. About 13 percent of reported sales to first-time buyers were cash sales compared to about 70 to 90 percent of buyers of property for investment purposes and international buyers.

[1] The RCI Survey asks about the most recent sale for the month.

The Latest Mortgage Purchase Applications

Wed, 06/11/2014 - 12:23
  • There was a surge in the number of people filing for mortgages in the first week of June. Applications for a home purchase increased 9.3 percent from the prior week after adjusting for the normal seasonal patterns. Refinance activity jumped 11 percent.
  • There have been many anecdotal stories of consumers getting lender pre-approval letters but unwilling to formally file for mortgage applications because of limited and unexciting inventory selections. But the recent increases in inventory are evidently reviving consumer interests.
  • With builders constructing more homes and as home prices continue to increase, the overall inventory will be rising.
  • Despite the latest gain, there is much room for further improvement. Mortgage applications for home purchases are still down by 14 percent from a year ago. Good thing cash sales have been holding on at a remarkable one-third of transactions even as investors have steadily exited the market (no longer active buyers, though investors are not yet selling).
  • Mortgage filings for home purchases will be rising. More inventory and more jobs are good combinations to help that trend. Policy changes will also help more mortgages get approved. The regulator of Fannie and Freddie has strongly hinted at modestly dialing-down the underwriting standards from excessively tight conditions. There are likely to be changes to the 3% cap on underwriting fees that has been in place. Any price controls limit credit availability, so lifting the artificial cap will help more consumers obtain mortgages.
  • Mortgage lenders, however, will face challenging times ahead. The refinance business is already down by more than 50 percent from one year ago and will likely sink even further. That’s because mortgage rates will be rising. Expect the 30-year fixed rate mortgage to average around 5 percent by early next year from the current 4.2 percent. Aside from mortgages for home purchases, lenders should give greater focus to commercial real estate loans since the job recovery is helping reduce retail and office vacancy rates.


REALTORS® in the American Workforce, by State

Tue, 06/10/2014 - 12:31

In a previous blog post, we took a look at the share of REALTOR® members relative to the number of employed persons nationally in the US over time.

In this post, we take a look at the share of REALTOR® members by state and thanks to some nifty visualization tools, we have the luxury of seeing this data through time and space.

What stands out in map below regardless of the year that you look is that there is geographic variation in the ratio of REALTOR® members to employed persons by state. If you take a look at this variation over time, you find that there is also some consistency in the shares by state.

Hawaii is a perennial leader, coming in with the highest share of REALTOR® members per employed persons in 19 of 34 years. Arizona is a close 2nd, coming in with the highest ratio in 15 of 34 years. These two states are the only two to rank number one in this metric from 1980 through 2013. In that time, the highest share of REALTOR® members per employed persons ranged from 0.9 to 2.3 percent.

By contrast, the state with the lowest share of REALTOR® members per employed persons has been more variable. In the 34 years observed, Mississippi, Maine, West Virginia, South Dakota, and North Dakota have all rotated in and out of this position. In every year, the state with the lowest share of REALTOR® members per employed persons has ranged between 0.2 and 0.4 percent.

Some states, such as Maine and North Carolina, started out with a lower share of members per employed person in the 1980s and now have consistently higher shares. Alaska and Louisiana saw higher shares in the early 1980s than they have in the most recent decade.

It’s beyond the scope of this short blog to get into the causes and outcomes of this variation by state and through time. This is merely the first step—understanding what the trend is. How has the share of REALTOR® membership relative to employed persons varied in your state?


Learn About Tableau

Inflation: the Short and Long-Run Scenarios

Tue, 06/10/2014 - 09:36
  • Broad inflation still looks tame, up less than 2 percent from one year ago, but could easily rise faster.  The annualized inflation in April was already speeding at a higher 2.4 percent rate (that is if price gain in April was to persist similarly for the next 12 months) and then accelerated even faster to 3.2 percent in May.
  • A higher inflation rate will mean higher mortgage rates.  Lenders need to charge a bit more since the returned money will have lost some purchasing power.  When the inflation rate was in the double-digits during the 1970s, the mortgage rates were also in the double-digits.
  • One key reason for inflationary pressure, though still mild, is that housing costs are rising and rising.  Apartment rents are rising at 4 percent rates according to a private sector source (REIS).  But this data is not counted in the official government statistics, which captures rent differently and from more regions.  According to the government, official rents are rising at 3.1 percent; though smaller compared to the private sector data it still marks the fastest rent increase in nearly 6 years.
  •  Home prices have been rising even faster, with a 5 percent gain according to NAR and 11 percent gain according to Case-Shiller home price index.  Home prices, however, do not get counted in the inflation data.  Rather, a murky homeowner equivalence rent is counted.  This data is fuzzy because it tries to estimate what a homeowner would pay in rent if the current lived-in home was a rental home.   Irrespective, this ambiguously imprecise measurement of homeowner equivalency rent rose 2.6 percent, the highest increase in nearly 6 years.
  • NAR expects CPI inflation to be 2.5 percent in 2014 and then pick up to 3.5 percent in 2015.  Home prices are expected to rise by 6 percent in 2014 and then slow to 5 percent in 2015.
  • Over the long-haul, some prices will rise faster than others.  Typically, prices of electronic gadgets like television fall over time.  Someone with a fixed-rate mortgage will pay the same amount for the rest of the lifespan of the loan, and not a cent more.  On the other hand, college tuition, if the past is a guide, could lead to not only a bankruptcy of the student but potentially also of the parents.  College tuitions have risen by 200 percent in the past 20 years.  Wages grew by 82 percent over the same period.
  • It is worth reflecting that one of the most creative times of human minds in human history occurred during the Renaissance, particularly from Florence, Italy.  Yet the most inventive minds of that time never went to college.  They were simply the Renaissance Men and Women.