Sunday
April 20, 2014

REALTOR® Confidence Wanes as Challenges Persist

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REALTOR® Confidence Wanes as Challenges Persist

A survey of real estate practitioners shows a slowdown in market activity, but some practitioners view it as a “welcome brake” on the rapid home price growth that’s occurred when there’s been only modest growth in consumer incomes and jobs, according to the latest REALTORS® Confidence Index for October. The survey of more than 3,000 real estate practitioners reflects expectations for home sales, prices, and market conditions.

Overall, confidence about current and future market conditions was down across all markets in October. However, single-family home confidence is still at an “above moderate” reading, according to the index.

The latest survey included the period of the 14-day federal government shutdown, Oct. 1-15. About 30 percent of ongoing transactions were temporarily impacted due to the federal government’s shutdown and from the closing of agencies like the IRS, FHA, USDA, and VA, according to the survey. 

Real estate practitioners also reported that higher mortgage rates were having an impact on sales, and that tight mortgage standards were disqualifying even some credit worthy buyers. Practitioners expressed concern that first-time buyers who required financing were being squeezed out by all-cash buyers or buyers who were able to come up with larger down payments. 

Practitioners noted some of the top concerns that could affect housing demand in the coming months include: the potential for tighter fiscal and monetary policies; the steep increases in flood insurance rates; the higher cost of home owner insurance for FHA-guaranteed loans; and the impact of the Affordable Care Act on housing affordability. 

Still, about 90 percent of the REALTORS® surveyed say they expect stable or increasing prices in the next 12 months. The median expected price increase is about 4 percent, according to the survey. 

—REALTOR® Magazine Daily News

Read more

Builders' Confidence Wanes in October