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REALTORS® Expect “Strong” Outlook Over the Next Six Months in Most States

In the monthly REALTORS® Confidence Index Survey, NAR asks REALTORS® “What are your expectations for the housing market over the next six months compared to the current state of the market in the neighborhood or area where you make most of your sales?” The map below shows the REALTORS® Confidence Index – Six-Month Outlook across property types by state based on responses from August-October 2015, reported in the October 2015 REALTORS® Confidence Index Survey Report. [1]

In the single-family homes market, all states, except for Vermont and Connecticut, had broadly “strong” to “very strong” markets. States with large oil-related sectors such as Texas, North Dakota, and Louisiana still had a broadly “strong” housing market despite the continuing slump in oil prices. Sustained job creation, the low interest rate environment, the offering of three percent downpayment conventional mortgages, and lower mortgage insurance premiums for FHA loans are likely sustaining the positive outlook for single-family homes.

In the townhomes market, 13 states had broadly “strong” markets, which included California, Oregon, Washington, Colorado, Texas, Florida, Maryland, and the District of Columbia.

The condominium market remains broadly “weak” except in nine states such as California, Washington, North Dakota, Colorado, Wyoming, Michigan, and Florida. REALTORS® have reported difficulty in accessing condominium unit purchase financing for both FHA-insured and GSE-backed loans. Only 20 percent of condominiums are eligible for FHA condominium unit financing because of strict eligibility criteria such as those pertaining to occupancy requirements and delinquency dues.[2]

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[1] 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 less than 30 observations. Respondents rated conditions or expectations as “Strong (100)”, “Moderate (50)”, and “Weak (0).” The responses are compiled into a diffusion 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”.