Research Behind the Scenes at the 2019 REALTORS® Legislative Meetings & Trade Expo: Leading Edge Advisory Board

On Tuesday May 14th, Brandi Snowden, Director, Member and Consumer Survey Research, presented survey findings on Association benefits and services to the Leading Edge Advisory Board committee meeting.

The Leading Edge Advisory Board’s goal is to provide feedback to the Strategic Thinking Advisory Committee in identifying, analyzing and providing input on emerging issues and the competitive landscape regarding the industry and association.  The Board consists of two members the Strategic Thinking Advisory Committee; one member of Finance; one local AE; one state AE; one member of the YPN Advisory Board; one Commercial member; and one past national president, among others.  Also included in the meeting was a panel discussion on the usefulness of benefits at the local, state and national level.  The three panelists were  Katherine Aronsson, REALTOR®, Shay Hata, REALTOR®, and Nobu Hata, Director of Membership Engagement at NAR, and the panel and round table discussions were lead by Leading Edge Advisory Board Chair, Terrie Suit, and Vice Chair, Otto Catrina.


Research Behind the Scenes at the 2019 REALTORS® Legislative Meetings and Expo: Sustainability Advisory Group

On Tuesday May 14th, Amanda Riggs, Research Survey Analyst, presented the results of the 2019 REALTORS® and Sustainability Report to the Sustainability Advisory Group at the 2019 REALTORS® Legislative Meetings and Expo.


The report was started in 2017, and the goal was to survey NAR members on their knowledge and interaction with sustainability practices in their real estate businesses. This is the third iteration of the report.  The survey was sent to 122,035 NAR members in March 2019 and received 6,047 responses for a 4.96 percent response rate.

Sixty-nine percent of residential respondents stated that energy efficiency promotion in listings was either very or somewhat valuable, and of those members who replied that their MLS has green data fields, 35% reported they used the fields to promote green features.

Twenty-five out of 40 members of the Sustainability Advisory Group have been appointed by other committees or advisory groups, and so embody a wide representation from leadership and areas in real estate like Appraisers, Multiple Listing Service representatives, Association Executives, and Government Affairs Directors.

Homebuying Continues to Pick Up in March 2019 Amid Favorable Economic Conditions

With economic conditions working in favor of homebuyers, REALTORS® reported an uptick in homebuying traffic in March 2019 compared to one year ago, according to NAR’s March  2019 REALTORS® Confidence Index Survey.[1] Low mortgage rate, a record low unemployment rate since 1953,  sustained job creation of more than 2 million per year since 2012, and an increase in real wage growth are all working in favor of homebuyers.

The REALTORS® Buyer Traffic Index increased to 63 in March 2019 (55 in February 2019), the fourth month of sustained recovery after it dipped to a low of 44 in November 2018 when mortgage rates hit almost five percent. But buyers started house-hunting again as mortgage rates started falling in December 2018 when the Federal Reserve put a hold on interest rate hikes for the year and adopted a patient policy stance. As of the week of May 9, the 30-year fixed rate has climbed down to near four percent, to 4.11 percent.[2] The REALTORS® Buyer Traffic Index leads existing and pending home sales by one to two months so the uptick in the March index indicates a stronger market in May, along with the seasonal uptick in homebuying activity.

NAR’s Pending Home Sales Index, which is an index of contracts signed, has generally been trending up since December 2018, except for a temporary dip in February, which appears to have been a temporary blip, perhaps due to the government shutdown during December 22, 2018 through January 25, 2019 and adverse weather conditions (e.g., polar vortex, bomb cyclone hurricane) that hit the Midwest and states from Minnesota down to Texas.

Buyer traffic conditions were stable or stronger during the 3-month period of January—March 2019 compared to the same period one year ago in 47 states and in the District of Columbia. However, REALTORS® reported weaker buyer traffic in California, Connecticut, and West Virginia.  Respondents from California have reported the lingering negative impact of the California wildfires on the supply of and demand for homes in affected areas. However, the lower mortgage rates and decline in prices in CA metros such as San Francisco should make homes more affordable and cause a pickup in homebuying activity in the coming months. Respondents from California and Connecticut also reported that high property taxes and the $10,000 limit on the combined itemized deduction for property taxes, state and local income tax (SALT)— are negatively affecting homebuying.

With mortgage rates falling, the mortgage payment arising on a median-priced home at 10 percent down payment has fallen from $1,259 in June 2018 to $1,151 as of March 2019, a savings of $108 per month, which amounts to $38,991 over a 30-year period.

The decline in mortgage rates is not the only positive factor underpinning the pickup in homebuying. Perhaps more important is the strong job and wage growth. The unemployment rate fell to a low of 3.6 percent in April 2019, the lowest since 1953; 2.6 million net new jobs were created as of April 2019 from one year ago; and the number of unemployed fell to 5.8 million from 6.3 million one year ago.  Wages continue to increase at a faster pace than inflation, with average weekly wages rising at nearly three percent in April 2019 from one year ago, ahead of inflation of two percent. Economic conditions are pointing to an increase in homebuying activity, which REALTORS® are seeing on the ground!

[1]In a monthly survey of REALTORS®, NAR asks respondents “Compared to the same month (January) last year, how would you rate the past month’s traffic in neighborhood(s) or area(s) where you make most of your sales?” NAR compiles the responses into an index, where an index above 50 indicates that more respondents reported “stronger” traffic than “weaker” traffic.  In generating the buyer traffic index at the state level, NAR uses data for the last three surveys to have close to 30 observations. Small states such as AK, ND, SD, MT, VT, WY, WV, DE, and D.C., may have fewer than 30 observations. The index is not seasonally adjusted, so a year-over-year comparison is appropriate.

[2] Freddie Mac Survey

March 2019 Housing Affordability Index

At the national level, housing affordability is down from last month but up from a year ago. Mortgage rates were down from last month at 4.51 percent this March, and down 2.6 percent compared to 4.63 percent a year ago.

  • Housing affordability inclined from a year ago in March moving the index up modestly 0.1 percent from 152.5 to 152.7. The median sales price for a single family home sold in March in the US was $261,100 up 3.8 percent from a year ago.
  • Nationally, mortgage rates were down 12 basis point from one year ago (one percentage point equals 100 basis points).
  • The payment as a percentage of income was up from last month at 16.4 percent this March and no change from a year ago. Regionally, the West has the highest payment at 22.6 percent of income. The South had the second highest payment at 16.0 percent followed by the Northeast at 15.3 percent. The Midwest had the lowest payment as a percentage of income at 13.0 percent.

  • Regionally, the Midwest recorded the biggest increase in home prices at 4.7 percent. The West had an increase of 3.4 percent while the Northeast had a gain of 2.4 percent. The South had the smallest gain in price of 1.9 percent.
  • Regionally, three of the four regions saw an incline in affordability from a year ago. The Midwest was the only region with a decline of 1.8 percent. West had the biggest gain in affordability of 2.6 percent. The South had an incline of 1.8 followed by the Northeast with a modest gain of 0.4 percent.
  • On a monthly basis, affordability is down from last month in three of the four regions while the Northeast had the only gain of 0.4 percent. The Midwest region had the biggest decline of 4.9 percent. The South had a dip of 2.1 percent followed by the West, which had the smallest drop in affordability of 1.3 percent.
  • Despite month-to-month changes, the most affordable region was the Midwest, with an index value of 192.2. The least affordable region remained the West where the index was 110.7. For comparison, the index was 155.8 in the South, and 163.8 in the Northeast.

  • Mortgage applications and credit availability are currently up and new home purchase applications declined. Median family incomes are growing 2.6 percent while home prices increased 3.8 percent. Inventories continue to grow helping tame price growth. Interest rates have dropped three months in a row, which will lower mortgage payments for future homebuyers.

  • What does housing affordability look like in your market? View the full data release here.
  • The Housing Affordability Index calculation assumes a 20 percent down payment and a 25 percent qualifying ratio (principal and interest payment to income). See further details on the methodology and assumptions behind the calculation here.

Instant Reaction: NAR Chief Economist Lawrence Yun on April Jobs Report

The following is NAR Chief Economist Lawrence Yun’s reaction to this morning’s U.S. Bureau of Labor Statistics (BLS) report on the employment situation in April:

“Fantastic news on the jobs market as abundant job openings are getting filled. Such conditions boost consumer confidence which further feeds the economy. Despite the hefty 263,000 net new job creation in April (and 2.6 million over the recent 12 months), essentially no jobs were added in the key housing sector where there is an acute housing shortage. Jobs in residential construction were reduced by 2,500 and grew by only 3,100 in residential contractor trade in April.

For the economy to rise in a healthy balanced way over the long haul, an adequate housing supply is a must. More home construction of mid-priced homes are needed so that teachers, nurses, and police officers are able to live in the community in which they serve. For that to happen, residential construction jobs and residential contractors need to grow by close to half a million. There is no expectation for quick gains as construction job openings go unfulfilled. Expect housing shortage to be a major issue in the next year’s election.”


Construction and Housing Starts Outlook for 2019—2028

Job growth continues to increase strongly, with the economy generating 2.5 million jobs in March 2019 from one year ago. Payroll employment rose in March 2019 from one year ago in all industries except for information services, utilities, and retail trade. With the economic recovery now on its 10th year of expansion, payroll employment has increased by 2.3 million annually since September 2010. With the unemployment rate at a low level of 3.9 percent, wages[1] have also been rising faster than inflation in all major industry groups except transportation and warehousing and manufacturing.

Construction jobs[2] rose by 239,000 in March 2019 from one year ago, the fourth largest source of job growth, next to health care & social assistance, accommodation & food services, professional & technical services, and manufacturing.

In terms of level change, the largest increases in construction jobs occurred in California, Washington, Nevada, Arizona, Texas, New York, Georgia, Florida, and West Virginia. As of March 2019, construction jobs made up a larger fraction of total nonfarm payroll employment—at six to eight percent—in Washington, Nevada, Utah, Idaho, Wyoming, Colorado, Florida, as well as Louisiana and West Virginia.

Notwithstanding the sustained and solid growth in construction jobs, residential construction employment is still below the peak pre-recession level. As of March 2019, there were 550,000 fewer people employed in residential building construction and specialty trades (2.9 million) compared to the peak levels during the housing market boom (3.45 million). Lack of construction labor has constrained the building of new homes, leading to a tight housing market.

In contrast, non-residential (‘commercial’) construction is now slightly above the peak pre-recession level. As of March 2019, there were 26,000 more people employed in the non-residential building construction and specialty trades (3.47 million) compared to the peak level during the housing market boom (3.44 million). The industrial and office commercial sectors have been growing strongly amid sustained economic growth, the penetration of data and technology in every industry requiring data storage facilities, and the expansion of e-commerce which has increased the demand for warehouses and distribution centers.

Housing starts projections for 2019-2028

During 2016 through 2018, jobs in building construction and specialty trade rose five percent on average and there was one housing start per five jobs created. Based on these recent trends, one can project that housing starts will increase from 1.362 million in 2018 to 2.0 million by 2028. In 2019, this means an increase of only 56,000 housing starts, and in 2020, an increase of 57,000 housing starts. This is still below the shortage of about 600,000 units[3] based on household formation and for replacement for obsolete/demolished housing.

Housing supply will continue to remain tight unless constructions job growth accelerates to more than the current annual pace of four percent. Addressing the current housing supply constraints will require collaboration between industries and trade-schools in attracting workers, including women, in construction. The relatively higher wage of construction workers compared to workers in manufacturing, transportation, and warehousing, education and health, retail trade, hospitality, and private industries in general, should attract workers in construction compared to these other industries, if workers are trained in these specialty skilled jobs.

With demand likely to outpace supply, there will also be increasing demand for housing that requires less construction labor, such as panelized and modular construction and manufactured housing.

View the State Employment Monitor report here.

[1] Average weekly wages, Bureau of Labor Statistics

[2] The construction industry (NAICS Code 23) is composed of the construction of buildings (residential and non-residential), heavy and civil engineering construction, and specialty trade contractors (residential and non-residential).

[3] Currently, there are 1.1 million housing starts, while household formation is running at about 1.3 million, a deficit of 200,000 units related to household formation alone. In addition, about 450,000 housing units are needed to replace units lost to obsolescence or that are demolished (0.36% of housing stock of 1.127 million units.

March 2019 Pending Home Sales

  • NAR released a summary of pending home sales data showing that March’s pending home sales pace was up 3.8 percent last month but fell 1.2 percent from a year ago.
  • Pending sales represent homes that have a signed contract to purchase on them but have yet to close. They tend to lead Existing-Home Sales data by 1 to 2 months.
  • Three of the four regions showed declines from a year ago with the South having a modest gain of 0.7 percent. The Northeast had the smallest drop in sales of 0.4 percent followed by the West with a decline of 1.6 percent. The Midwest experienced the biggest dip in contract signings of 5.0 percent.
  • From last month, three of the four regions showed inclines in contract signings. The West region had the biggest gain of 8.7 percent followed by the South with an increase of 4.4 percent. The Midwest had a gain of 2.3 percent and the Northeast was the only region to have a decline of 1.7 percent.
  • The U.S. pending home sales index level for the month was 105.8. February’s data was revised to 101.9.

  • March’s incline brings the pending index back above the 100 level mark for the third consecutive month.
  • The 100 level is based on a 2001 benchmark and is consistent with a healthy market and existing home sales above the 5 million mark.

REALTORS® Confidence Index Survey: March 2019 Highlights

The REALTORS® Confidence Index (RCI)[1] survey gathers monthly information from REALTORS® about local real estate market conditions, characteristics of buyers and sellers, and issues affecting homeownership and real estate transactions.[2] This report presents key results about market transactions from March 2019. View and download the full report here.

Market Conditions and Expectations

  • The REALTORS® Buyer Traffic Index registered at 63 (73 in March 2018).[3]
  • The REALTORS® Seller Traffic Index registered at 46 (43 in March 2018).
  • The REALTORS® Confidence Index—Six-Month Outlook Current Conditions registered at 69 for detached single-family, 57 for townhome, and 54 for condominium properties. An index above 50 indicates market conditions are expected to improve.
  • Properties were typically on the market for 36 days (30 days in March 2018).
  • Eighty-three percent of respondents reported that home prices remained constant or rose in March 2019 compared to levels one year ago (89 percent in March 2018).

Characteristics of Buyers and Sellers

  • First-time buyers accounted for 33 percent of sales (30 percent in March 2018).
  • Vacation and investment buyers comprised 18 percent of sales (16 percent in March 2018).
  • Sales of distressed properties (foreclosed or sold as a short sale) accounted for 3 percent of sales (4 percent in March 2018).
  • Cash sales made up 21 percent of sales (20 percent in March 2018).
  • Twenty-one percent of sellers offered incentives such as providing warranty (10 percent), paying for closing costs (9 percent), and undertaking remodeling (4 percent).[4]

Issues Affecting Buyers and Sellers

  • From January 2019–March 2019, 76 percent of contracts settled on time (78 percent in January 2018–March 2018).
  • Among sales that closed in March 2019, 72 percent had contract contingencies. The most common contingencies pertained to home inspection (53 percent), obtaining financing (40 percent), and getting an acceptable appraisal (39 percent).
  • REALTORS® report “interest rate” and “low inventory” as the major issues affecting transactions in March 2019.

About the RCI Survey

  • The RCI Survey gathers information from REALTORS® about local market conditions based on their client interactions and the characteristics of their most recent sales for the month.
  • The March 2019 survey was sent to 50,000 REALTORS® who were selected from NAR’s more than 1.3 million members through simple random sampling and to 10,000 respondents in the previous three surveys who provided their email addresses.
  • There were 4,146 respondents to the online survey which ran from April 1-10, 2019. The survey’s overall margin of error at the 95 percent confidence level is one percent. The margins of error for subgroups and sample proportions of below or above 50 percent are larger.
  • NAR weighs the responses by a factor that aligns the sample distribution of responses to the distribution of NAR membership.

The REALTORS® Confidence Index is provided by NAR solely for use as a reference. Resale of any part of this data is prohibited without NAR’s prior written consent. For questions on this report or to purchase the RCI series, please email:

[1] Thanks to Gay Cororaton, Research Economist for their data analysis and comments to the RCI Report.

[2] Respondents report on the most recent characteristics of their most recent sale for the month.

[3] An index greater than 50 means more respondents reported conditions as “strong” compared to one year ago than “weak.” An index of 50 indicates a balance of respondents

who viewed conditions as “strong” or “weak.”

[4] The difference in the sum of percentages to the total percentage of sellers who offered incentives is due to rounding.

March 2019 Existing-Home Sales

  • NAR released a summary of existing-home sales data showing that housing market activity this March, fell 4.9 percent from February 2019. Despite February’s gains, sales of existing-homes dropped 5.4 percent from March 2018. March’s existing-home sales reached a 5.21 million seasonally adjusted annual rate.

  • The national median existing-home price for all housing types was $259,400 in March, up 3.8 percent from a year ago. This marks the 85th consecutive month of year-over-year gains.

  • Regionally, all four regions showed growth in prices from a year ago. The Midwest had largest gain of 4.6 percent followed by the West with a gain of 3.1 percent. The Northeast had an increase of 2.5 percent followed by the South with an incline of 2.4 from March 2018.
  • March’s inventory figures are up from last month 3.1 percent to 1.68 million homes for sale. Compared with March of 2018, there was a 3.2 percent increase in inventory levels. It will take 3.9 months to move the current level of inventory at the current sales pace. It takes approximately 36 days for a home to go from listing to a contract in the current housing market, up from 30 days a year ago.

  • From February 2019, all four regions showed declines in sales. The West had the biggest dip in sales at 7.9 percent followed by the West with a decline of 6.0 percent. The South fell 3.4 percent followed by the Northeast with the smallest drop of 2.9 percent.
  • All four regions showed declines in sales from a year ago. The West had the biggest drop in sales of 10.7 percent followed by the Midwest with a decline of 8.6 percent. The South fell 2.1 percent followed by the Northeast dip of 1.5 percent. The South led all regions in percentage of national sales, accounting for 43.8 percent of the total, while the Northeast had the smallest share at 12.9 percent.

  • In March, single-family sales were down 4.9 percent and condominiums sales were down 5.3 to last month. Single-family home sales fell 4.7 percent and condominium sales were down 11.5 compared to a year ago. Single-family homes had an increase in price up 3.8 percent at $261,100 and condominiums rose 3.6 percent at $244,400 from March 2018.