REALTOR® confidence about the outlook for real estate markets over the next six months fell across the single-family, townhouse, and condominium markets in July. A confluence of factors tempered REALTOR® optimism: higher mortgage rates, rapid price gains amid a slow economic recovery, lack of inventory in many areas, and stringent credit conditions. REALTORS® ascribed the low volume of condominium sales to lack of FHA financing, with many condominiums not being FHA-approved. The Indexes for buyer and seller traffic also declined in July, additional indicators of market deceleration.
What Does This Mean for REALTORS®? The decline in REALTOR® confidence is probably temporary as the market adjusts to interest rates, a lack of inventory, and a leveling off of prices. The economy continues its slow but positive expansion along with the creation of additional jobs (a major driver of housing demand). Recent concerns about an over-heated housing recovery or, alternatively, a housing market slipping back into decline appear to be irrelevant based on available data.