REALTORS® Confidence Index
The REALTORS® Confidence Index is a key indicator of housing market strength based on a monthly survey sent to over 50,000 real estate practitioners. Practitioners are asked about their expectations for home sales, prices and market conditions. In addition, the "Questions of the Month," feature results of a timely aspect of the housing market.
The February data indicates that market conditions have slowed compared to the robust growth in 2012 through mid-2013. REALTORS® reported that the unusual winter conditions negatively affected sales in many states on the East Coast, in the Midwest, and on the West Coast.
Low levels of inventory remain a major issue across many states, especially in Florida and California. Purchasing a home continues to be difficult for some non-cash and first-time buyers. The combination of rising prices, higher interest rates, and added fees such as FHA’s up front and continuing mortgage insurance premiums has eroded affordability. Modest job and income growth and difficult underwriting standards have also held off prospective buyers. Under such conditions, REALTORS® indicated strong demand for rental properties.
REALTORS® reported on issues that can potentially impact the market in 2014. These include the expiration of the tax break for forgiven debt in the case of short sales, the continuing adverse impact of the uncertainty related to the cost of obtaining flood insurance, and the sluggish economic recovery. Most REALTORS® expect prices to continue rising, albeit at a modest pace. REALTORS® expect some seasonal upswing in the coming months.