Highlights of April 2016 REALTORS® Confidence Index Survey

Market conditions vary across local markets, but the REALTORS^® confidence and traffic indices indicate that overall housing market activity slightly improved in April 2016 from April 2015. Compared to one year ago, housing market activity was essentially unchanged.[1] REALTORS^® reported strong demand in their areas, but severely low inventory has weighed heavily on sales, pushing prices up and making homes increasingly unaffordable, especially for first-time buyers.

First-time home buyers accounted for 32 percent of sales. Purchases for investment purposes made up 13 percent of sales, while distressed properties were seven percent of sales. Cash sales accounted for 24 percent of sales. Nationally, half of properties that sold in April 2016 were on the market 39 days. Contracts that went into settlement in April typically took 40 days to close.

Very low supply, steep price increases, and lender processing delays were reported as the key issues affecting sales, particularly to first-time homebuyers. Appraisal backlogs and “below-market” and “inconsistent” appraisals were also reported to be causing transaction delays and cancellations.The collapse in oil prices remains a concern in the oil-producing states of North Dakota, Alaska, New Mexico, Wyoming, Oklahoma, Texas, and Montana. Still, with the spring and summer months coming, respondents were confident about the outlook for the next six months across all property types. Respondents typically expected prices to increase 3.8 percent in the next 12 months.

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[1] The indices are not seasonally adjusted.

[2] NAR’s 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.