Real estate market strong over the next six months, thanks to 30-year fixed rates that remain below 4 percent, continued job growth, and recent measures that have made credit more accessible and cheaper.
Across all property types (single family, townhomes, and condos), the number of Realtors indicating that their market was "strong" outnumbered those who viewed the market as "weak," according to the April 2015 Realtors Confidence Index Survey, which is based on responses from more than 1,000 Realtors about their latest transactions.
With stronger buyer demand and tight supplies, homes continue to sell relatively quickly – typically within 39 days in April – according to the survey.
Those surveyed expect prices to increase at a faster pace in the next 12 months, with the median expected price growth nationwide to be 3.9 percent (up from 3.5 percent expectation in March's survey).
Realtors in Colorado were the most upbeat about price increases. They expect median price growth to hit 6 percent, followed by the District of Columbia at 5 percent.
Florida and seven other states ranked in the second tier for expect price growth, with Realtors predicting something in the 4 to 5 percent range. An additional 16 states expect price increases in the 3 to 4 percent range; the remaining states foresee 2 to 3 percent. There is no U.S. state in which Realtors expect a price decline or increase less than 2 percent over the next 12 months.
Recent measures to ease credit requirements had a profound impact on the housing market, such as lower Federal Housing Administration mortgage insurance premiums and the re-introduction of Fannie Mae and Freddie Mac 3 percent downpayment loans.
Most upbeat about the overall housing market in states like North Dakota, Texas, Oklahoma, California, Oregon, Washington, Florida, New York, and Massachusetts, according to the survey. Also, outlook over the townhome and condo markets remained highest in Colorado.
For-sale inventories remain tight in many states but seller traffic was reportedly improving.
While real estate professionals remain generally optimistic about housing's outlook for the next six months, the did note a few concerns, however:
- Tight inventory in most states, especially for move-in ready and "affordable" units
- Financing issues, such as qualifying for a mortgage still remains tough and the underwriting process is slow, leading to delayed closings
- Appraisal valuation concerns and delays due to "questionable" comps, particularly for FHA/VA loans, the use of "out-of-town appraisers" and second appraisal requirements
- Impact of the new mortgage procedures (RESPA-TILA) on closings
- Negative impact of low oil prices in states with oil/gas production
- Slowing demand from international buyers (e.g., Canadians) due to strong U.S. dollar
- Uncertainties associated with flood insurance rates
- Impact of upcoming interest rate increase on demand
