Professional Documents
Culture Documents
Research Division
NATIONAL ASSOCIATION of REALTORS
500 New Jersey Avenue, NW
Washington, DC 20001
202.383.1000
1
The survey is sent to 50,000 REALTORS who are selected through simple random sampling. To increase the response rate,
the survey is also sent to respondents in the previous three surveys who provided their email addresses. The number of responses
to a specific question varies because the question may not be applicable to the respondent or because of non-response. To
encourage survey participation, eight REALTORS are randomly selected to receive a gift card.
2
Thanks to Jessica Lautz, Managing Director, Survey Research and Communications, Meredith Dunn, Research
Communications Manager, Brandi Snowden, Research Survey Analyst, and Amanda Riggs, Research Survey Analyst, for their
input in improving the survey questions and in editing the report.
Table of Contents
Summary .................................................................................................................................................... 3
I.
Summary
Market conditions vary across local markets, but the REALTORS confidence and traffic indices
indicate that overall market activity improved in February 2016 compared to one year ago and to
the previous month. Sustained job creation and the low cost of obtaining a mortgage continue to
support housing demand. However, lack of supply across many states is weighing on sales and
driving up prices, making homes less affordable especially for first-time buyers.
First-time home buyers accounted for 30 percent of sales. Purchases for investment purposes
made up 18 percent of sales, while distressed properties were ten percent of sales. Respondents
from New York, a state which follows a judicial foreclosure process that typically takes longer
than a non-judicial process, reported an increase in distressed properties in the market. Cash sales
accounted for 25 percent of sales. Nationally, properties typically were on the market 59 days
and took 40 days to close the contract. There are reports that TRID has led to longer rate lock
and escrow periods, but there are also reports that TRID has been fairly easy to deal with and
that the new rules are not a major problem largely because the industry prepared for the
changes in the time between announcement and implementation. 3
Very low supply, steep price increases, and lender processing delays were reported as the key
issues affecting sales, especially to first-time homebuyers. Appraisal backlogs and belowmarket and inconsistent appraisals were also reported to be causing transaction delays and
cancellations. The collapse in oil prices is also a concern in oil-producing states such as Texas,
Wyoming, Montana, and Oklahoma. Still, with the spring and summer months coming,
respondents were generally confident about the outlook for the next six months across all
property types. Respondents typically expected prices to increase 3.6 percent in the next 12
months.
February 2016 REALTORS Confidence Index Survey Highlights
RCI Current Conditions: Single-Family Sales
RCI Six-Month Outlook: Single-Family Sales
RCI Buyer Traffic Index
RCI Seller Traffic Index
4
First-Time Home Buyers, as Percent of Sales
Sales to Investors, as Percent of Sales
Cash Sales, as Percent of Sales
Distressed Sales, as Percent of Sales
Median Days on Market
Median Expected Price Growth in Next 12 Months (%)
Feb 2016
64
76
65
43
30
18
25
10
59
3.6
Jan 2016
59
75
59
40
32
17
26
9
64
3.4
Feb 2015
63
75
61
41
29
14
26
11
62
3.4
The TILARESPA Integrated Disclosure (TRID) regulations came into effect on October 3, 2015. The new guidelines are
intended to provide disclosures that will be helpful to consumers in understanding the key features, costs, and risks of the
mortgage for which they are applying.
4
NARs 2015 Profile of Home Buyer and Sellers (HBS) reports that among primary residence home buyers, 32 percent were
first-time home buyers. The HBS surveys primary residence home buyers, while the monthly RCI Survey surveys REALTORS
and also captures purchases for investment purposes and vacation/second homes.
I.
Market Conditions
60
40
44
20
200801
200806
200811
200904
200909
201002
201007
201012
201105
201110
201203
201208
201301
201306
201311
201404
201409
201502
201507
201512
Single-family
Townhome
Condominium
5
This is a diffusion index which measures the direction of and broadness of the respondents market conditions or confidence.
An index of 50 indicates a balance of respondents having weak (index=0) and strong (index=100) expectations or all
respondents having moderate (=50) expectations. The index is not adjusted for seasonality.
6
FHA and the GSEs have financing eligibility criteria relating to ownership occupancy requirements, delinquent dues, project
approval process, and use for commercial space. See the Statement of the National Association of REALTORS Submitted for the
Record to the Senate Committee on Banking Housing and Urban Affairs on December 9, 2014 at
http://www.ksefocus.com/billdatabase/clientfiles/172/1/2180.pdf
76
60
58
53
40
20
200801
200805
200809
200901
200905
200909
201001
201005
201009
201101
201105
201109
201201
201205
201209
201301
201305
201309
201401
201405
201409
201501
201505
201509
201601
Single-family
Townhome
Condominium
The following maps show the REALTORS Confidence IndexSix-Month Outlook across
property types by state. 8 Compared to current conditions in the single-family homes market, all
states, except for Delaware, Vermont, and West Virginia, were expected to have broadly
strong to very strong markets in the next six months, partly because of the seasonal uptick in
spring and summer. In the townhomes market, the outlook varies from weak to very strong
across the states, with very strong market outlooks in Colorado and Nebraska. In the
condominium market, the outlook is also mixed across the states, with the District of Columbia
having the strongest outlook, the only area where the index registered very strong.
REALTORS have reported difficulty in accessing condominium unit purchase financing for
loans insured by both the Federal Housing Administration (FHA) and government sponsored
enterprises Fannie Mae and Freddie Mac (GSEs). Only 20 percent of condominiums are eligible
for FHA condominium unit financing because of strict eligibility criteria such as those pertaining
7
Respondents were asked What are your expectations for the housing market over the next six months compared to the current
state of the market in the neighborhood(s) or area(s) where you make most of your sales?
8
The market outlook for each state is based on data for the last three months to increase the observations for each state. Small
states such as AK, ND, SD, MT, VT, WY, WV, DE, and D.C., may have fewer than 30 observations. Respondents rated
conditions or expectations as Strong (100), Moderate (50), and Weak (0). The responses are compiled into a diffusion
index. Index values 25 and lower are considered very weak, values greater than 25 to 49 are considered weak, a value of 50
is considered moderate, values greater than 50 to 75 are considered strong, and values greater than 76 are considered very
strong.
to occupancy requirements and delinquent dues. 9 In spite of some comments expressing concern
about the low oil prices, the respondents in the oil-producing states of Texas, Colorado,
Montana, and Nebraska broadly had a positive outlook about conditions in the next six months.
10
11
Source: Average weekly earnings seasonally-adjusted data, Bureau of Labor Statistics, downloaded from Haver Analytics.
Source: Census Bureau. Characteristics of Units in New Multifamily Buildings Completed, Units Per Building, 2014.
80
70
65
60
50
43
40
30
201512
201507
201502
201409
201404
201311
201306
201301
201208
201203
201110
201105
201012
201007
201002
200909
200904
200811
200806
200801
20
Measured by the REALTORS Buyer Traffic Index, buyer traffic was strong in many states but
weak in some states in the Northeast, Midwest, and South. 12 The slump in oil prices has led to
weak buyer traffic conditions in North Dakota and Wyoming, while Texas continues to
experience strong buyer demand.
12
The index for each state is based on data for the last three months to increase the observations for each state. Small states such
as AK, ND, SD, MT, VT, WY, WV, DE, and D.C., may have fewer than 30 observations. Respondents were asked How do you
rate the past month's buyer traffic in the neighborhood(s) or area(s) where you make most of your sales? Respondents rated
conditions or expectations as Strong (100), Moderate (50), and Weak (0). The responses are compiled into a diffusion
index. Index values 25 and lower are considered very weak, values greater than 25 to 49 are considered weak, a value of 50
is considered moderate, values greater than 50 to 75 are considered strong, and values greater than 76 are considered very
strong.
Meanwhile, seller traffic was weak across most states, measured by the REALTORS Seller
Traffic Index. 13
13
Respondents were asked How do you rate the past month's seller traffic in the neighborhood(s) or area(s) where you make
most of your sales? Respondents rated conditions or expectations as Strong (100), Moderate (50), and Weak (0). The
responses are compiled into a diffusion index. Index values 25 and lower are considered very weak, values greater than 25 to
49 are considered weak, a value of 50 is considered moderate, values greater than 50 to 75 are considered strong, and
values greater than 76 are considered very strong.
All: 59
Foreclosed: 57
Not distressed: 57
150
100
50
All
Foreclosed
Short sale
201602
201511
201508
201505
201502
201411
201408
201405
201402
201311
201308
201305
201302
201211
201208
201205
201202
201111
201108
201105
Not distressed
11
Respondents were asked For the last house that you closed in the past month, how long was it on the market from listing time
to the time the seller accepted the buyers offer? The median is the number of days at which half of the properties stayed on the
market. In generating the median days on market at the state level, we use data for the last three surveys to have close to 30
observations. Small states such as AK, ND, SD, MT, VT, WY, WV, DE, and D.C., may have fewer than 30 observations.
10
Nationally, approximately 35 percent of properties were on the market for less than a month
when sold. About 15 percent were on the market for longer than six months.
40%
35%
30%
25%
20%
15%
10%
5%
0%
201601
201602
By state, properties typically sold within a month in the District of Columbia, Colorado, and
Alaska. Properties typically sold between 31 and 45 days in Washington, California, Utah,
Arizona, Minnesota, Nebraska, Kansas, and Oklahoma. In some oil-producing states which are
undergoing slower job growth following the collapse of oil prices, such as Montana, Wyoming,
New Mexico, and Louisiana, properties stayed on the market between 61 and 90 days. Texas
appears more resilient to the oil price collapse, as properties typically sold between 46 and 60
days. Local conditions vary, and the data is provided for REALTORS who may want to
compare local markets against the state and national summary.
11
30%
30%
20%
10%
200810
200902
200906
200910
201002
201006
201010
201102
201106
201110
201202
201206
201210
201302
201306
201310
201402
201406
201410
201502
201506
201510
201602
0%
12
First-time buyers accounted for about 32 percent of all home buyers based on data from NARs 2015 Profile of Home Buyers
and Sellers (HBS). The HBS is a survey of primary residence home buyers and does not capture investor purchases but does
cover both existing and new home sales. The RCI Survey is a survey of REALTORS about their transactions and captures
purchases for investment purposes and second homes for existing homes.
12
20%
15%
10%
5%
200810
200902
200906
200910
201002
201006
201010
201102
201106
201110
201202
201206
201210
201302
201306
201310
201402
201406
201410
201502
201506
201510
201602
0%
30%
20%
10%
Foreclosed
13
201602
201510
201506
201502
201410
201406
201402
201310
201306
201302
201210
201206
201202
201110
201106
201102
201010
201006
201002
200910
200906
200902
200810
0%
Short sale
The survey asks respondents to report on the characteristics of the most recent sale for the month.
13
200810
200902
200906
200910
201002
201006
201010
201102
201106
201110
201202
201206
201210
201302
201306
201310
201402
201406
201410
201502
201506
201510
201602
25%
201601
201510
201507
201504
201501
201410
201407
201404
201401
201310
201307
201304
201301
201210
201207
201204
201201
201110
201107
201104
37%
14
54%
38%
201408
201409
201410
201411
201412
201501
201502
201503
201504
201505
201506
201507
201508
201509
201510
201511
201512
201601
201602
8%
14
http://www.realtor.org/reports/housing-opportunities-and-market-experience-survey
The creditor should deliver the Loan Estimate or place it in the mail no later than the third business day after receiving the
loan application. The creditor is required to ensure that the consumer receives the Closing Disclosure no later than three business
days before the consummation of the loan. If the creditor provides a new Closing Disclosure, the consumer must be provided
with another three-business day waiting period. Guidelines at http://files.consumerfinance.gov/f/201508_cfpb_tila-respaintegrated-disclosure-rule.pdf.
15
15
Nearly half of REALTOR respondents reported a longer closing period compared to a year ago.
Among contracts that closed in February 2016, the median number of days to close a contract
was 40 days, up from 36 days in July 2015 when NAR first started tracking this information. To
meet the required review of the Closing Disclosure under the new guidelines, respondents have
reported writing a 45day closing period into their contracts or extending the usual closing
period by one to two weeks.
While there are reports that TRID is causing delays and making transactions difficult, there
are also reports that TRID has been fairly easy to deal with and that the TRID rules arent a
major problem, largely because the industry prepared for the changes in the time between
announcement and implementation. However, REALTORS have taken issue with not being
able to have access to the Closing Disclosure. Without access, they cannot quickly review the
documents for errors, and delays in catching errors can lead to delays in home closings.
Percent of Respondents Who Reported a
Longer Closing Period Compared to a Year Ago
47%
53%
49%
47%
201601
201602
37%
201510
201511
201512
42
35
41
35
4042
43
40
44
40
46
42
43
40
Average
16
Contract Settlement Issues: Financing, Home Inspection, and Appraisals are Major Issues
In reporting on their last contract that went into settlement or was terminated over the period
December 2015February 2016, 63 percent of contracts were settled on time, 30 percent had
delayed settlement, and seven percent were terminated.
100%
80%
60%
40%
20%
0%
Among contracts that had a delayed settlement (30 percent), financing, home inspection, and
appraisal issues were the primary causes of the delay.
16%
16%
11%
8%
8%
5%
2%
1%
22%
42%
*Based on the respondent's most recent contract that went into settlement or was terminated during this
period. Percentages will not sum to 100 percent because multiple responses are allowed. "Other" includes
buyer or seller backing out, price disagreement, non-price disagreement, HOA issues, builder delays,
17
Among contracts that were terminated (seven percent), home inspection issues were the major
case of delay, followed by issues related to the buyer obtaining financing.
Problems Encountered for Contracts That Were Terminated
in December 2015February 2016*
(Terminated Contracts Represent Seven Percent of
Closed or Terminated Contracts)
Home inspection/environmental issues
Issues related to obtaining financing
22%
Appraisal issues
11%
No problems encountered
8%
Contingencies stated in the contract
6%
Issues in buy/sell distressed property
6%
Buyer lost job
5%
Titling/deed issues
4%
Home/hazard/flood insurance issues
3%
Other
27%
27%
*Based on the respondent's most recent contract that went into settlement or was terminated during this
period. Percentages will not sum to 100 percent because multiple responses are allowed. "Other" includes
buyer or seller backing out, price disagreement, non-price disagreement, HOA issues, builder delays, etc.
18
19