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REALTOR® Confidence Still High, But a July Dip

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.

Jed Smith, Managing Director, Quantitative Research

Jed Smith is Managing Director, Quantitative Research with the National Association of Realtors®. He has worked on real estate issues for the past 20 years, providing input on a variety of housing, commercial real estate, tax, and planning issues. Recently he has been involved in several international studies.

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