Realtors Confidence Index 12-22-2015

8/20/2019 Realtors Confidence Index 12-22-2015

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REALTORS® CONFIDENCE INDEX SURVEY

Report on the November 2015 Survey

The REALTORS ® Confidence Index ( RCI ) report provides monthly information about real estatemarket conditions and expectations, buyer/seller traffic, price trends, buyers’ characteristics, andissues affecting real estate based on a monthly survey of REALTORS®.

The November 2015 report is based on the responses of 2,643 REALTORS® about local marketconditions experienced in November and the characteristics of their most recent sale for themonth. The data collected f rom a random sample of REALTORS® is viewed to be representativeof the sales for the month.1 The online survey was conducted from December 2-9, 2015. All realestate is local: conditions in specific markets may vary from the overall national trends presentedin this report. REALTORS® may be interested in comparing their markets against the nationalsummary.

The RCI repor t is an output of the Research Division of the NATIONAL ASSOCIATION of REALTORS®.2 For questions or information about this report, please email [email protected].

Lawrence Yun, Senior Vice President and Chief EconomistDanielle Hale, Managing Director, Housing ResearchGay Cororaton, Research EconomistMeredith Dunn, Research Communications Manager

Research Division NATIONAL ASSOCIATION of REALTORS® 500 New Jersey Avenue, NW

Washington, DC 20001202.383.1000

1 The survey is sent to 50,000 REALTORS® who are selected through simple random sampling. To increase the response rate,the survey is also sent to respondents in the previous three surveys who provided their email addresses. The number of responsesto a specific question varies because the question may not be applicable to the respondent or because of non-response. Toencourage survey participation, eight REALTORS® are randomly selected to receive a gift card.2 Thanks to Jessica Lautz, Managing Director, Survey Research and Communications, Meredith Dunn, ResearchCommunications Manager, Brandi Snowden, Research Survey Analyst, and Amanda Riggs, Research Survey Analyst, for theirinput in improving the survey questions and in editing the report.

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Table of Contents

Summary .................................................................................................................................................... 3

I. Market Conditions ............................................................................................................................ 4

REALTORS® Broadly Reported Unchanged Market Conditions from a Month Ago ............................ 4

REALTORS® Still Broadly Optimistic Over the Next Six Months ........................................................ 5

REALTORS® Reported Slower Buyer and Seller Traffic Compared to a Year Ago .............................. 7

REALTORS® Expect Prices to Increase Modestly in Next 12 Months ................................................... 9

Properties on the Market at 54 Days ....................................................................................................... 10

II. Buyer and Seller Characteristics ......................................................................................................... 12

Sales to First-Time Buyers: 30 Percent of Sales ..................................................................................... 12

Sales for Investment Purposes: 16 Percent of Sales ............................................................................... 13

Distressed Sales: Nine Percent of Sales .................................................................................................. 13

Cash Sales: 27 Percent of Sales .............................................................................................................. 15

Age, Previous Residence, and Type of Property Purchased ................................................................... 17

III. Current Issues .................................................................................................................................... 19

Impact of TRID on Contract Settlement ................................................................................................. 19

Contract Settlement Issues: Financing, Home Inspection, and Appraisals are Major Issues ................. 20

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Summary

Market conditions vary across local markets and states, but the REALTORS® confidence andtraffic indices indicate no substantial change in market activity in November 2015 compared toOctober 2015. Compared to a year ago, market activity improved. Sustained job creation, the low

interest rate environment, and measures to reduce the cost of borrowing and make credit moreaccessible to responsible borrowers continue to bolster the housing market recovery. However,the implementation of the TILA/RESPA Integrated Disclosure (TRID) regulations on October 3,2015, appears to be delaying the settlement of contracts and impacting sales. About 47 percent ofrespondents reported longer closing times compared to a year ago, up from 37 percent in theOctober 2015 survey.

First-time home buyers accounted for 30 percent of sales, essentially unchanged from the previous months’ figures. Cash sales rose to 27 percent of sales as purchases for investment purposes also increased to 16 percent of sales and distressed properties rose to nine percent ofsales. Properties typically sold within 54 days nationally compared to 65 days a year ago. It

typically took another 40 days to close a sale, up from 35 days in July 2015.

Tight inventories, decreased affordability, and more stringent credit standards continued to bereported as key issues affecting sales, especially of first-time homebuyers. “Late” and “low”appraisal valuation, tighter inspection guidelines, and difficulty in obtaining financing forcondominium purchases were also reported as factors weighing down the market recovery.

November 2015 REALTORS® Confidence Index Survey HighlightsNov 2015 Oct 2015 Nov 2014

RCI Current Conditions: Single-Family Sales 57 57 49

RCI Six-Month Outlook: Single-Family Sales 68 63 60

RCI Buyer Traffic Index 50 52 43RCI Seller Traffic Index 38 40 35

First-Time Home Buyers, as Percent of Sales1 31 31 31

Sales to Investors, as Percent of Sales 16 13 15

Cash Sales, as Percent of Sales 27 24 25

Distressed Sales, as Percent of Sales 9 6 9

Median Days on Market 54 57 65

Median Expected Price Growth in Next 12 Months (%) 3.2 3.2 3.0

1 - 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.

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I. Market Conditions

REALTORS® Broadly Reported Unchanged Market Conditions from a Month Ago

Market conditions vary across local markets and states, but the indices on current conditionsindicate that market activity in November 2015 was substantially unchanged compared toOctober 2015. Compared to a year ago, REALTORS® broadly reported stronger market activity.REALTORS® reported the implementation of the TILA/RESPA Integrated (TRID) guidelines onOctober 3, 2015, has led to a longer time to close transactions, with about 47 percent of allrespondents reporting a longer time to close compared to a year ago.

The REALTORS ® Confidence Index - Current Conditions chart below shows the single-familyhomes index stayed at 57, a level consistent with more respond ents citing “strong” than “weak”market conditions (57 in October 2015; 49 in November 2014).3 The index for townhomes also

stayed at 41, while the index for condominiums fell to 36, and both were both below 50, whichindicates that more respondents viewed their markets as “weak” rather than “strong.”REALTORS® continued to report on the difficulty of obtaining financing for condominium unit purchases because many condominiums are not FHA or GSE eligible.4

3 This is a diffusion index which measures the direction of and broadness of the respondents’ market conditions or confidence.An index of 50 indicates a balance of respondents having “weak” (index=0) and “strong” (index=100) expectations or allrespondents having moderate (=50) expectations. The index is not adjusted for seasonality effects.4 FHA and the GSEs have financing eligibility criteria relating to ownership occupancy requirements, delinquent dues, projectapproval process, and use for commercial space. See the Statement of the National Association of REALTORS® Submitted for the

Record to the Senate Committee on Banking Housing and Urban Affairs on December 9, 2014 athttp://www.ksefocus.com/billdatabase/clientfiles/172/1/2180.pdf

57

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REALTORS® Confidence Index: Current Conditions

as of November 2015

(50 = "Moderate" Conditions)

Single-family Townhome Condominium

4

http://www.ksefocus.com/billdatabase/clientfiles/172/1/2180.pdfhttp://www.ksefocus.com/billdatabase/clientfiles/172/1/2180.pdfhttp://www.ksefocus.com/billdatabase/clientfiles/172/1/2180.pdf


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REALTORS® Still Broadly Optimistic Over the Next Six Months

Local market conditions vary, but REALTORS® remained by and large “strongly” confidentabout the outlook over the next six months for single-family homes.5 The REALTORS ®

Confidence Index - Six-Month Outlook registered at 68 (63 in October 2015; 60 in November2014). The confidence index for townhomes rose to 51, indicating “moderate” conditions (47 inOctober 2015; 44 in November 2014). The index for condominiums also rose but stayed below50, indicating that more respondents viewed their markets as “weak” than “strong.”

The following maps show the REALTORS ® Confidence Index - Six-Month Outlook across property types by state. All states, except f or New Mexico, Vermont, and Connecticut had broadly “strong” to “very strong” markets.6 States with large oil-related sectors such as Texas, North Dakota, and Louisiana still had broadly “strong” housing markets. In the townhomes andcondominium markets, only a handful of states have broadly “strong” markets, which includesCalifornia, Oregon, Washington, North Dakota, Utah, Colorado, Michigan, Florida, and theDistrict of Columbia. REALTORS® have reported difficulty in accessing condominium unit purchase financing for both FHA-insured and GSE-backed loans. Only 20 percent ofcondominiums are eligible for FHA condominium unit financing because of strict eligibilitycriteria such as those pertaining to occupancy requirements and delinquency dues.7

5 Respondents were asked “What are your expectations for the housing market over the next six months compared to the currentstate of the market in the neighborhood(s) or area(s) where you make most of your sales?”6 The market outlook for each state is based on data for the last three months to increase the observations for each state. Smallstates such as AK, ND, SD, MT, VT, WY, WV, DE, and D.C., may have less than 30 observations. Respondents rated conditionsor expectations as “Strong (100)”, “Moderate (50)”, and “Weak (0).” The responses are compiled into a diffusion index. Values25 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”.7 http://www.realtor.org/topics/condominiums/condominium-resource-book

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REALTORS® Confidence Index: Six-Month Outlook

as of November 2015

(50 = "Moderate" Outlook)


5

http://www.realtor.org/topics/condominiums/condominium-resource-bookhttp://www.realtor.org/topics/condominiums/condominium-resource-bookhttp://www.realtor.org/topics/condominiums/condominium-resource-bookhttp://www.realtor.org/topics/condominiums/condominium-resource-book


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REALTORS® Reported Slower Buyer and Seller Traffic Compared to a Year Ago

While local conditions vary, buyer traffic eased in November 2015 compared to October 2015, but was broadly “strong” compared to a year ago when the index indicated a “weak” market. The REALTORS

® Buyer Traffic Index registered at 50 in November 2015 (52 in October 2015; 43 in

November 2014).

Meanwhile, supply remains tight. The REALTORS ® Seller Traffic Index registered at 38 (40 inOctober 2015 and 35 in November 2014). While the construction of new privately ownedhousing units has been improving, reaching 1.2 million units in the third quarter of 2015, roughly

35 percent of recent new construction has been multi-family structures which are typically forrental occupancy. Historically, multi-family structures accounted for only 20 percent of newconstruction, so the availability of single-units for purchase among recently constructed properties is lower than is historically normal. REALTORS® reported low inventory of properties in the lower price range and for those that are move-in ready.

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Buyer traffic was “strong” in 24 states and “very strong” in the District of Columbia, measured by the REALTORS ® Buyer Traffic Index.8

8 The index for each state is based on data for the last three months to increase the observations for each state. Small states suchas AK, ND, SD, MT, VT, WY, WV, DE, and D.C., may have less than 30 observations. Respondents were asked “How do yourate the past month's buyer traffic in the neighborhood(s) or area(s) where you make most of your sales?” The responses were“Strong (100)”, “Moderate (50),” and “Weak (0).” 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 areconsidered “strong”, and values greater than 76 are considered “very strong”.

50

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REALTORS® Buyer and Seller Traffic Indexes

as of November 2015

(50 = "Moderate" Conditions)

Buyer Traffic Index Seller Traffic Index

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Meanwhile, seller tr affic was broadly “weak” across most states, measured by the REALTORS ® Seller Traffic Index.

9 Seller traffic was “strong” in North Dakota and “moderate” in NewHampshire.

REALTORS® Expect Prices to Increase Modestly in Next 12 Months

REALTORS® who responded to the November 2015 survey expected prices to increase by 3.2 percent over the next 12 months (3.2 percent in October 2015; 3.0 percent in November 2014).REALTORS® expect the recent strong price growth to moderate as rising prices have made

homes “unaffordable” for many. The pace of price increase has started to moderate: the median price of an existing home fell to $219,600 in October 2015 from $221,700 in September 2015.

The map shows the median expected price change in the next 12 months for each state based onthe September – November 2015 RCI surveys.10 REALTOR ® respondents from Washington,Oregon, Wyoming, Colorado, and Florida were the most upbeat, with a median expected pricegrowth in the range of four to five percent. Compared to expectations in previous months, nostate had a median expected price growth of over five percent, an indication that prices areexpected to rise at a modest pace in the next 12 months.

9 Respondents were asked “How do you rate the past month's seller traffic in the neighborhood(s) or area(s) where you makemost of your sales?” The responses were “Strong (100)”, “Moderate (50),” and “Weak (0).” Respondents rated conditions orexpectations as “Strong (100)”, “Moderate (50)”, and “Weak (0).” The responses are compiled into a diffusion index. Values 25and 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”.

10 In generating the median price expectation at the state level, we use data for the last three surveys to have close to 30observations. Small states such as AK, ND, SD, MT, VT, WY, WV, DE, and D.C., may have less than 30 observations.

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Properties on the Market at 54 Days

Properties that closed in October 2015 were typically on the market for a shorter time comparedto a year ago, staying on the market for 54 days (57 days in October 2015; 65 days in November2014).11 Fewer days on the market is an indication that inventory remains tight. Short sales wereon the market for the longest time at 91 days, while foreclosed properties typically stayed on themarket for 47 days. Non-distressed properties were typically on the market for 54 days.

Approximately 37 percent of properties were on the market for less than a month when sold.About 12 percent were on the market for longer than six months, a decrease from 30 percent inJanuary 2012. Properties that stay on the market for longer are more likely to sell at a discount.

11 Respondents were asked “For the last house that you closed in the past month, how long was it on the market from listing time

to the time the seller accepted the buyer’s offer?” The median is the number of days at which half of the properties stayed on themarket. In generating the median days on market at the state level, we use data for the last three surveys to have close to 30observations. Small states such as AK, ND, SD, MT, VT, WY, WV, DE, and D.C., may have less than 30 observations.

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Median Days on Market of Sales Reported By REALTOR®

Respondents as of November 2015

All Foreclosed Short sale Not distressed

All: 54 Foreclosed: 47 Short sale: 91 Not distressed: 54

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Properties typically sold within a month in the District of Columbia, Utah, Colorado, SouthDakota, and Hawaii. Despite the slump in oil prices, properties typically sold within two monthsin Texas, Nebraska, Kansas, and Louisiana. All real estate is local. State-level data is providedfor REALTORS® who may want to compare local markets against the state and nationalsummary.

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than 9

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than 12

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12

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Percentage Distribution of Time on Market of Sales Reported by

REALTOR® Respondents as of November 2015

201411 201510 201511

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P e r c e n t o f s a l e s ,

b y d a

y s o n m a r k e t

Days on Market

Properties That Stay Longer on the Market are More Likely to

Be Sold at a Discount, January-November 2015

Net discount of 12% or higher Net discount of 4% to 11%

Net discount of less than 4% No discount or premium

Net premium of up to 4% Net premium of 4% to 11%

Net premium of 12% or higher

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II. Buyer and Seller Characteristics

Sales to First-Time Buyers: 30 Percent of Sales

The share of first-time home buyers has remained essentially unchanged for the last five years.First-time home buyers accounted for 30 percent of existing home sales in November 2015 (31 percent in October 2015; 31 percent in November 2014).12 REALTOR ® respondents reported

that tight inventory, increasingly unaffordable prices, and credit profiles that fail to meet tighterunderwriting standards are conditions that continue to work against first-time home buyers.

12 First-time buyers accounted for about 32 percent of all home buyers based on data from NAR’s 2015 Profile of Home Buyers

and Sellers (HBS). The HBS is a survey of primary residence home buyers and does not capture investor purchases but doescover both existing and new home sales. The RCI Survey is a survey of REALTORS® about their transactions and captures

purchases for investment purposes and second homes for existing homes.

12

http://www.realtor.org/reports/highlights-from-the-2014-profile-of-home-buyers-and-sellershttp://www.realtor.org/reports/highlights-from-the-2014-profile-of-home-buyers-and-sellershttp://www.realtor.org/reports/highlights-from-the-2014-profile-of-home-buyers-and-sellershttp://www.realtor.org/reports/highlights-from-the-2014-profile-of-home-buyers-and-sellershttp://www.realtor.org/reports/highlights-from-the-2014-profile-of-home-buyers-and-sellershttp://www.realtor.org/reports/highlights-from-the-2014-profile-of-home-buyers-and-sellers


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Sales for Investment Purposes: 16 Percent of Sales

Approximately 16 percent of REALTORS® reported that their last sale was for investment purposes (13 percent in October 2015; 15 percent in November 2014). Purchases for investment purposes have generally been on the decline with fewer distressed sales on the market. At their peak in 2012-2013, investment sales were approximately 20 percent of sales.

Distressed Sales: Nine Percent of Sales

Distressed sales accounted for nine percent of sales (six percent in October 2015; nine percent in November 2014). Foreclosed properties were seven percent of sales, while short sales were two

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First-time Buyers as Percent of Market as of November 2015

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Sales to Investors as Percent of Residential Market

as of November 2015

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percent of sales.13 With rising home values and fewer foreclosures, the share of sales ofdistressed properties has generally continued to decline. Distressed sales accounted for about athird to a half of sales until 2011. Distressed properties sold at a discount of ten to 19 percent,depending on the condition of the property.

Distressed sales have fallen, with fewer properties in foreclosure (739,847 properties in theforeclosure inventory as of the third quar ter of 2015 from a peak of two million properties in2009-2010, or 1.9 percent of mortgages).14 Fewer distressed sales and foreclosures improvehome values, creating more home equity for the homeowner. As of the second quarter of 2015,the equity of all households in real estate was valued at $12.4 trillion, or 57 percent of the value

13 The survey asks respondents to report on the characteristics of the most recent sale for the month.

14 Mortgage Bankers Association, seasonally adjusted data.

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Distressed Sales, As Percent of Sales Reported by REALTOR®Respondents as of November 2015

Foreclosed Short sale

Foreclosed: 7% Short sale: 2%

10%

14%

19%

10%12%

18%

0%

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Above average Average Below average

Mean Percent Price Discount by Property Condition

of Distressed Sales in Past 12 Months

Ended November 2015

Foreclosed Short sale

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of households’ real estate assets. Household equity peaked at $13.3 trillion in the first quarter of2006.

Cash Sales: 27 Percent of Sales

Approximately 27 percent of sales were all-cash (24 percent in October 2015; 25 percent in November 2014). Buyers of homes for investment purposes, second homes, and foreign clientsare more likely to pay cash than first-time home buyers. As sales to investors and distressed properties have fallen, the share of cash sales has declined as well. The share of cash sales to the

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F o r e c l o s u r e i n v e n t o r y ,

i n m i l l i o n s

A s p e r c e n t o f m o r t g a g e s

Mortgage Foreclosure Inventory

Foreclosure Inventory As percent of mortgages

Source: Mortgage Bankers Association, downloaded from Haver Analytics

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Owner's Equity,

as % of RE assetsOwner's Equity,

$ bn

Household's Owner's Equity in Real Estate

Households: Owners' Equity in Real Estate (NSA, Bil $)

Households: Owners' Equity in Real Estate as a % of Household Real Estate (%)Source: FRB, Flow of Funds , Table B.101, from Haver Analytics

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market has declined compared to the levels in 2010-2014, but the share remains elevatedcompared to levels before the housing downturn.

Among financed home purchases, respondents reported that 39 percent made a downpayment of

at least 20 percent, about the same since 2011 when NAR started collecting this data. Amongfinanced purchases by first-time home buyers, 68 percent had downpayment terms of zero to six percent, a decrease from 77 percent of first-time buyers in 2009. Low downpayment loans have ahigher monthly mortgage payment and typically require mortgage insurance, but are an optionfor home buyers who do not have large savings and are willing to pay the higher monthly payment. The decreased share of low downpayment loans is one indicator that access to credithas become more difficult for borrowers who cannot make higher downpayments. In 2015,

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Cash Sales as Percent of Market as of November 2015

65% 64%

56%

49%

17%

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70%

International Investor Second

home

Distressed

sale

Relocation First-time

buyer

Percent of Sales That are All-Cash By Type of Buyer

in November 2015

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Fannie Mae and Freddie Mac started purchasing three percent downpayment mortgages of borrowers who meet underwriting guidelines.

Age, Previous Residence, and Type of Property Purchased

Buyers, 34 years and under, accounted for 26 percent of home sales reported by the respondents.Buyers, 35 to 55 years old, accounted for half of sales. Buyers, 56 and over, represented 24 percent. Older buyers are likely to purchase homes for investment purposes, as second homes, oras a trade-down of a primary residence.

39%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

2 0 1 1 0 4

2 0 1 1 0 7

2 0 1 1 1 0

2 0 1 2 0 1

2 0 1 2 0 4

2 0 1 2 0 7

2 0 1 2 1 0

2 0 1 3 0 1

2 0 1 3 0 4

2 0 1 3 0 7

2 0 1 3 1 0

2 0 1 4 0 1

2 0 1 4 0 4

2 0 1 4 0 7

2 0 1 4 1 0

2 0 1 5 0 1

2 0 1 5 0 4

2 0 1 5 0 7

2 0 1 5 1 0

Percent of Mortgage Sales With Downpayment of

At Least 20 Percent as of November 2015

68%

50%55%60%65%

70%75%80%85%90%

2 0 0 9 0 6

2 0 0 9 0 9

2 0 1 0 0 2

2 0 1 0 0 5

2 0 1 0 0 8

2 0 1 0 1 1

2 0 1 1 0 2

2 0 1 1 0 5

2 0 1 1 0 8

2 0 1 1 1 1

2 0 1 2 0 2

2 0 1 2 0 5

2 0 1 2 0 8

2 0 1 2 1 1

2 0 1 3 0 2

2 0 1 3 0 5

2 0 1 3 0 8

2 0 1 3 1 1

2 0 1 4 0 2

2 0 1 4 0 5

2 0 1 4 0 8

2 0 1 4 1 1

2 0 1 5 0 2

2 0 1 5 0 5

2 0 1 5 0 8

Percent of First-time Buyers Obtaining a Mortgage Who Made

a Downpayment of 0% to 6% as of November 2015*

*The data reported for the month is a rolling three-month figure.

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Slightly more than half of all reported buyers lived in homes they owned immediately prior totheir recent home purchase. These buyers include trade-up or trade-down buyers and those whoare purchasing a second home or one for investment purpose. Home buyers, who were rentingimmediately prior to their recent home purchase, accounted for 35 percent of sales, essentiallyunchanged compared to past months.

Sales data compiled for the December 2014-November 2015 timeframe showed that among buyers 34 years and under, 86 percent purchased single-family homes, compared to the 77 percent rate for buyers 56 years and older. Buyers of ages 56 and over are about twice as likelyto purchase a condominium as other buyers. REALTORS® have also reported a demand for 55

26%

50%

24%

0%

10%

20%

30%

40%

50%

60%

2 0 1 3 0 7

2 0 1 3 0 9

2 0 1 3 1 1

2 0 1 4 0 4

2 0 1 4 0 7

2 0 1 4 0 8

2 0 1 4 0 9

2 0 1 4 1 0

2 0 1 4 1 1

2 0 1 4 1 2

2 0 1 5 0 1

2 0 1 5 0 2

2 0 1 5 0 3

2 0 1 5 0 4

2 0 1 5 0 5

2 0 1 5 0 6

2 0 1 5 0 7

2 0 1 5 0 8

2 0 1 5 0 9

2 0 1 5 1 0

2 0 1 5 1 1

Age Distribution of Buyers for Sales Reported by REALTOR®

Respondents as of November 2015

Age 34 and under Age 35 to 55 Age 56 and over

35%

56%

9%

0%

10%

20%

30%

40%

50%

60%

2 0 1 4 0 8

2 0 1 4 0 9

2 0 1 4 1 0

2 0 1 4 1 1

2 0 1 4 1 2

2 0 1 5 0 1

2 0 1 5 0 2

2 0 1 5 0 3

2 0 1 5 0 4

2 0 1 5 0 5

2 0 1 5 0 6

2 0 1 5 0 7

2 0 1 5 0 8

2 0 1 5 0 9

2 0 1 5 1 0

2 0 1 5 1 1

Living Status of Home Buyers at Time of Home Purchase of

Sales Reported by REALTORS® as of November 2015

Rents an apartment or houseLives in own home

Lives with parents, relatives, or friends

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and older community housing as the large baby boomer population continues to move intoretirement.

III. Current Issues

Impact of TRID on Contract Settlement

On the impact of the “Know Before You Owe”/TRID regulations that took effect on October 3,2015, 47 percent of respondents reported that they are experiencing a longer time to closecompared to a year ago, up from 37 percent in the October 2015 survey.

86% 86%77% 84%

7% 6%7%

6%7% 8%

17% 10%

0%

20%

40%

60%

80%

100%

Age 34 and under Age 35 to 55 Age 56 and over All

Type of Residential Property Purchased by Age Group

in January - November 2015


Yes47%

No

53%

"In the most recent month, did you observe a longer

time to close compared to your typical closing time in

the same period last year?"

Source: NAR, November 2015 RCI Survey

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The median days to close in November 2015 was 40 days, up from 36 days in July 2015 when NAR first started collecting this information from the RCI survey.

Contract Settlement Issues: Financing, Home Inspection, and Appraisals are Major Issues

In reporting on their last contract that went into settlement or was terminated over the periodSeptember – November 2015, REALTORS® reported that 32 percent of contracts had delayedsettlement. The share of delayed contracts appears to be on the rise.

Among contracts that had a delayed settlement (32 percent), 46 percent had financing issues, anincrease compared to the share of about 40 percent in the first half of 2015.

3635 35

40 40

201507 201508 201509 201510 201511

Median Days to Close

65% 64% 63% 63% 65% 65% 64% 64% 62%

26% 26% 28% 29% 29% 29% 30% 29% 32%

9% 10% 9% 7% 6% 7% 6% 7% 6%

0%

20%

40%60%

80%

100%

How Sales Contracts Were Settled in

September - November 2015*

Contract was terminated

Contract was delayed but eventually went into settlement

Contract was settled on time

* Based on the most recent contract that went into settlement or was terminated during

this period.

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Among contracts that were terminated (six percent), 22 percent had financing issues and 22

percent had home inspection issues.

46%

21%

14%

9%

7%

6%

3%

3%

1%

22%

Issues related to obtaining financing

Appraisal issuesHome inspection/environmental issues

Titling/deed issues

Contingencies stated in the contract

Issues in buy/sell distressed property

No problems encountered

Home/hazard/flood insurance issues

Buyer lost job

Other

Problems Encountered for Contracts That Were Delayed But Eventually

Went Into Settlement in September - November 2015

(Delayed Contracts Represent 32 Percent of Closed or Terminated Contracts)

*Will not sum to 100 percent because multiple responses are allowed. "Other" includes buyer or sellerbacking out, price disagreement, non-price disagreement, HOA issues, builder delays, etc.

40% 41% 39%

47% 47%42%

46%

0%5%

10%15%20%25%30%

35%40%45%50%

Among Contracts That Had Delayed Settlement*, Percent of

Contracts with Issues Related to Obtaining Financing

*Accounts for about a third of contracts that went into settlement or were terminated.

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22%22%

16%

9%

8%

6%

5%

3%

2%

18%

Issues related to obtaining financing

Home inspection/environmental issues

Appraisal issues

Contingencies stated in the contract

No problems encountered

Buyer lost job

Issues in buy/sell distressed property

Titling/deed issues

Home/hazard/flood insurance issues

Other

Problems Encountered for Contracts That Were Terminated

in September - November 2015

(Terminated Contracts Represent Six Percent of

Closed or Terminated Contracts)

*Will not sum to 100 percent because multiple responses are allowed. "Other" includes buyer or seller backing

out, price disagreement, non-price disagreement, HOA issues, builder delays, etc.

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The NATIONAL ASSOCIATION of REALTORS®

, “The Voice for Real Estate,” isAmerica’s largest trade association, representing over 1 million members, including NAR’sinstitutes, societies, and councils, involved in all aspects of the real estate industry. NARmembership includes brokers, salespeople, property managers, appraisers, counselors andothers engaged in both residential and commercial real estate. The term REALTOR ® is aregistered collective membership mark that identifies a real estate professional who is amember of the National Association of REALTORS® and subscribes to its strict Code ofEthics. Working for America's property owners, the National Association provides a facilityfor professional development, research, and exchange of information among its members,and to the public and government for the purpose of preserving the free enterprise system andthe right to own real property.

The Mission of the NATIONAL ASSOCIATION of REALTORS® Research Division is tocollect and disseminate timely, accurate, and comprehensive real estate data and to conducteconomic analysis in order to inform and engage members, consumers, policy makers, andthe media in a professional and accessible manner.

To find out about other products from NAR’s Research Division, visitwww.REALTOR.org/research-and-statistics

Also follow NAR Research on

https://twitter.com/nar_research

https://www.facebook.com/narresearchgroup https://www.pinterest.com/narresearch/

https://instagram.com/narresearch/

NATIONAL ASSOCIATIONof

REALTORS

®

Research Division500 New Jersey Avenue, NWWashington, DC 20001202.383.1000

23
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Realtors Confidence Index 12-22-2015

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