We’re ending this week with a little good news, the REALTORS® Confidence Index has been released by NAR (National Association of Realtors) and most Realtors concur, the national real estate market is getting better.
The Confidence Index is a critical barometer on the overall strength of the real estate market based on NAR’s monthly Realtor survey sent to over 50,000 real estate professionals. Realtors were queried about their expectations for residential real estate sales, prices and the market conditions in their specific region.
According to the National Association of Realtors, things are looking up for 2015. Despite Mother Nature pounding the Midwest and the eastern seaboard, this year’s heavy winter snow has had little negative affect on the overall consumer confidence index. Increasing across the board, the REALTORS® Confidence Index- improved for all property types during February 2015 compared to January 2014 and a year ago.
A confidence index above 50 signifies that the number of Realtors who answered NAR’s survey believe their markets are “strong” – outnumbering those who viewed them as “weak.”
The overall Realtor confidence index for a single-family residential unit increased to 63 – it was 58 in Jan. 2015 & 60 in Feb. 2014. The national conference index for townhomes/condominiums also got a shot in the arm, though it remains below 50.
According to NAR’s survey, REALTORS® also stated that the FHA’s (Federal Housing Administration) and the GSE’s (Fannie and Freddie) financing regulations made condominium financing challenging to obtain. While there is anecdotal evidence that credit issues (read: tightness) are starting to ease, REALTORS® also credited the market’s dramatic rebound to the steep reduction in the FHA monthly mortgage insurance premium, as well as the introduction of the 3% down payment for conventional mortgages.
National Association of REALTORS® Confidence Index: Just the facts!
- Confidence about the outlook for the next six months improved in February across all property types.
- The anticipated seasonal uptick in sales in the spring, the positive effect of low mortgage rates, and lower mortgage insurance premium payments underpinned the increased confidence.
- REALTORS® reported a severe inventory shortage in most areas, especially for properties in the lower price range and for those that are move-in ready.
- Although prices have been rising, many homeowners are still reluctant to list as they wait for prices to pick up further to build up more equity.
- About 19 percent of mortgaged properties, mostly lower priced homes, have equity below 20 percent.
View NAR’s entire Confidence Index here