REALTORS® generally continued to view current conditions in the single–family home market as “strong” with the Index-Current Conditions [1] holding steady at 71 in June. A level of 50 delineates “moderate” conditions. The Index for townhouses was unchanged at 51. The Index for condominiums approached the 50 level. REALTORS® ascribed the low volume of condominium sales to problems in FHA financing. [Source: June REALTORS® Confidence Index (RCI) Survey]
Although demand remained broadly robust, recent increases in interest rates were reported as deterring some potential buyers from purchases, but also inducing other potential buyers to move forward quickly in anticipation of possible additional interest rates increases. Tight underwriting standards coupled with protracted bank approval processes continued to frustrate home buying activity, especially for first-time homebuyers. Inventory was reported to be low compared to demand although there has been some easing in recent months. REALTORS® also raised concerns about the dampening effect of new regulations such as the increase in mortgage insurance premiums and lifetime payment under certain conditions.
What Does this Mean for REALTORS®?
After a number of years of concerns about the overall conditions of the housing market the data indicate a substantial and ongoing upswing.
[1] The Index is calculated as a weighted average of the responses, evaluated at 0-Weak, 50-Moderate, and 100-Strong.
