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Highlights of the December 2016 REALTORS® Confidence Index Survey Report

While local conditions vary, the REALTORS® Buyer Traffic Index and the REALTORS® Confidence IndexCurrent Conditions for single-family homes remained above 50 in December 2016, indicating that more respondents reported “strong” than “weak” conditions, according to the December 2016 REALTORS® Confidence Index Survey Report, a monthly survey of REALTORS® about their sales activity and local market conditions.[1] Both indices were higher than their levels in December 2015 and were essentially unchanged from November 2016 levels.[2] The REALTORS® Seller Traffic Index slightly increased from one year ago, but it has remained below 50 since November 2008, indicating that seller activity is still “weak.”

In December 2016, first-time homebuyers accounted for 32 percent of sales (32 percent in 2016; 30 percent in 2015) .[3] With fewer new foreclosures, distressed properties accounted for seven percent of sales (seven percent in 2016; nine percent in 2015), purchases for investment purposes made up 15 percent of sales (14 percent in 2016; 14 percent in 2015), and cash sales accounted for 21 percent of sales (23 percent in 2016; 24 percent in 2015). Amid tight supply, half of properties that sold in December 2016 were on the market for 52 days or less compared to 58 days in December 2015 (43 in 2016; 50 in 2015).

Lack of supply and appraisal-related problems were the main issues reported by REALTORS®. Respondents also expressed concern about the impact of rising mortgage rates. Overall, respondents were confident about the outlook over the next six months for the single-family homes, townhomes, and condominiums markets, with the six-month outlook confidence indices for these markets registering at 50 and above.

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[1] An index greater than 50 indicates the number of respondents who reported “strong” (index=100) outnumbered those who reported “weak” (index=0). An index equal to 50 indicates an equal number of respondents reporting “strong” and “weak” market conditions. The index is not adjusted for seasonality effects.

[2] An index greater than 50 indicates the number of respondents who reported “strong” (index=100) outnumbered those who reported “weak” (index=0). An index equal to 50 indicates an equal number of respondents reporting “strong” and “weak” market conditions. The index is not adjusted for seasonality effects.

[3] NAR’s 2016 Profile of Home Buyer and Sellers (HBS) reports that among primary residence home buyers, 35 percent were first-time homebuyers, up from 32 percent in 2015. The HBS surveys primary residence homebuyers, while the monthly RCI Survey surveys REALTORS® and includes purchases for investment purposes and vacation/second homes.

Danielle Hale, Director of Housing Statistics

As a Research Economist at NAR, Danielle studies tax issues, the wealth impact of home ownership, and different measures of home prices.

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