NAR’s Confidence Index shows upswing

The National Association of Realtors® conducts a monthly study on Realtors outlooks about the housing market, and the Realtors Confidence Index for single-family home sales in December increased to 31.6 from November’s 30.4. However, it increased 7.1 points in one year – since December 2010 – when it was 24.5. Overall, the Index has shown a slowly improving market outlook.

The index for townhouses was 18.5 in December down slightly down from November’s 18.7. A year earlier, however, it was 12.6. The index for condos also decreased to 14.3 from November’s 15.3, but one year earlier it was only 10.3.

The index also measured Realtors’ outlooks by region. Overall, the West had the highest outlook at 35.0, but the South – which includes Florida – came in second at 33.3. One year earlier, the South’s index stood at 25.1.

Overall, 55 percent of Realtors surveyed expect prices to rise over the next year, an increase from 50 percent only one month earlier; and 7 percent of Realtors expect prices to rise 5 percent or more compared to November’s 6 percent. On the flip side, 38 percent of Realtors expect prices to fall, but that’s less than the 43 percent who said the same thing one month earlier.

In an analysis, NAR Chief Economist Lawrence Yun said 2012 kicks off with “a significant amount of good news. … Existing home sales in December were up from a year ago. Pending sales – that is, contract signings – were 5 percent ahead of a year ago. Housing inventory – the number of homes available for sale – has declined (both for existing and newly built homes). Housing affordability continues at record high levels.”

Yun says that one major problem still hangs over the housing market, however: Many middle-class buyers have been shut out of the market because they cannot obtain a mortgage.

“Loan qualifications have become so strict since 2009 that only borrowers with super-high credit scores and spotless credit history are able to obtain mortgages,” Yun says. According to one-third of the Realtors surveyed, access to credit was the most important factor limiting clients’ ability to buy a home.

The complete Realtors Confidence Index is available online.
Source: Florida Realtors®