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 information gathered concerning transactions in October indicates a slowing down of market activity compared to acceleration in 2012 to the middle of 2013. However, some REALTORS® saw the slowdown as a welcome brake to the rapid home price growth amid the modest growth in consumer incomes and jobs.
The October survey captured the effect of the government shutdown. The survey indictated that about 30 percent of ongoing transactions were temporarily impacted by the closure of agencies such as the IRS, FHA, USDA, VA.
Inventory has been increasing, but it remains tight in many states. Prices are still rising, although at a less torrid pace than previously. On the buying side of the market, REALTORS® continued to report that higher mortgage rates have impacted the level of sales and that stricter mortgage standards are disqualifying even some credit worthy buyers. There is also continued concern that first time buyers using mortgage financing are being crowded out by buyers paying cash and those putting in larger downpayments.
REALTORS® also reported issues that they foresee as affecting demand in the coming months: the potential impacts of tighter fiscal and monetary policies, the steep increase in flood insurance rates, the higher cost of homeowner insurance for FHA-guaranteed loans, and the impact of the Affordable Care Act on housing affordability.