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    REALTORS® CONFIDENCE INDEX SURVEYReport on the July 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 July 2015 report is based on the responses of 2,910 REALTORS® about local marketconditions experienced in July. Of those who responded, 1,856 respondents closed a sale and provided information about the characteristics of their last closed transaction in July. The datacollected from a random sample of REALTORS® is viewed to be representative of the sales forthe month.1 The online survey was conducted from August 1-10, 2015. All real estate is local:conditions in specific markets may vary from the overall national trends presented in this report.REALTORS® may be interested in comparing their markets against the national summary.

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

    Lawrence Yun, Senior Vice President and Chief EconomistJed Smith, Managing Director, Quantitative ResearchGay Cororaton, Research EconomistMeredith Dunn, Research Communications Manager

    Research Division

     NATIONAL ASSOCIATION of   REALTORS®500 New Jersey Avenue, NWWashington, 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.

    1

    mailto:[email protected]:[email protected]:[email protected]

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    Table of Contents

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

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

    REALTORS® Broadly Reported Slower Markets ................................................................................... 4 

    REALTORS’® Outlook Over the Next Six Months More Moderate ...................................................... 5 

    REALTORS® Generally Reported Slower Buyer and Seller Traffic ...................................................... 8 

    70 Percent of REALTORS® Reported Higher Prices from a Year Ago ................................................ 10 

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

    Properties Stayed on the Market Longer at 42 Days............................................................................... 13  

    II. Buyer and Seller Characteristics  ......................................................................................................... 15

    Sales to First-Time Buyers: 28 Percent of Sales ..................................................................................... 15 

    Sales for Investment Purposes: 13 Percent of Sales ............................................................................... 17  

    Distressed Sales: Seven Percent of Sales ................................................................................................ 18 

    Cash Sales: 23 Percent of Sales .............................................................................................................. 19 

    International Transactions: Less than One Percent of Residential Market ............................................. 21 

    Rents Continue to Increase ..................................................................................................................... 22 

    III. Current Issues  .................................................................................................................................... 23

    Credit Conditions .................................................................................................................................... 23 Contract Settlement Issues ...................................................................................................................... 25 

    2

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    Summary

    The information provided by REALTORS® based on their client interactions indicates an easingof market activity in July 2015 compared to June 2015, but show an improvement compared toJuly 2014. There were reports that activity slowed after a strong spring market and that the steep

    home price increases in recent months have started to dampen demand. Rising prices have madeobtaining FHA-insured loans more difficult, because loan limits have not adjusted in line with prices.

    The confidence indices for current conditions and the six-month outlook for single-family,townhome, and condominium properties all declined slightly—indicative of a slowing market.The indices are, however, well above the levels of a year ago. The REALTORS® Buyer Traffic Index also slid to 62, while the REALTORS® Seller Traffic Index stayed at below 50, anindication of tight supply across many local markets. Properties stayed on the market longer at amedian of 42 days nationally. First-time home buyers accounted for 28 percent of sales. Cashsales made up 23 percent of sales, purchases for investment purposes accounted for 13 percent of

    sales, and distressed properties dropped to seven percent of sales. Approximatley 12 percent ofrespondents worked with a potential buyer who was previously involved in a foreclosure or shortsale.

    Respondents noted several issues weighing down the market’s momentum, including tightinventories of available homes, decreasing affordability, continued tight mortgage availability,and slow/excessively conservative appraisals. REALTORS® also expressed concern that newdisclosure regulations may delay closings as well as uncertainties about flood insurance rates.Finally, the question of potential increases in interest rates continues to cause some marketuncertainty.

    July 2015 REALTORS® Confidence Index Survey Highlights

    July 2015 June 2015 July 2014RCI Current Conditions: Single-family Sales 68 73 60

    RCI Six-Month Outlook: Single-family Sales 68 72 60

    RCI Buyer Traffic Index 62 67 55

    RCI Seller Traffic Index 46 48 45

    First-time Buyers, as Percent of Sales1  28 30 29

    Sales to Investors, as Percent of Sales 13 12 16

    Cash Sales, as Percent of Sales 23 22 29

    Distressed Sales, as Percent of Sales 7 8 9

    Second/ vacation homes, as Percent of Sales 9 8 11

    Relocation Buyers, as Percent of Sales 14 15 15

    Median Days on Market 42 34 48Median Expected Price Growth in Next 12 Months (%) 3.6 3.4 3.4

    1 - NAR’s 2014 Profile of Home Buyer and Sellers (HBS ) reports that among primary residence home buyers, 33 percent were first-time

    home buyers. The HBS surveys primary residence home buyers, while the monthly RCI Survey  surveys REALTORS® and captures

    purchases for investment purposes and vacation/second homes.

    3

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    I. Market Conditions

    REALTORS® Broadly Reported Slower Markets

    REALTORS® generally reported a slower market in July 2015 compared to the previous month,

    although market activity was broadly better compared to July 2014. There were reports thatdemand appeared to have eased after the market picked up strongly in the spring, with someattributing this to the steep increase in prices.

    Confidence indices declined for all types of properties. The confidence index for single-familyhomes slid to 68 after three months at over 70 (73 in June 2015; 60 in July 2014). The index fortownhomes also fell to 49 after three months at over 50 (53 in June 2015; 44 in July 2014). Theindex for condominiums stayed below 50 at 45 (48 in June 2015; 39 in July 2014). Still, the REALTORS® Confidence Index Current Conditions indicates that the single-family homesmarket was broadly “strong.” A confidence index above 50 indicates that the number ofrespondents who viewed their markets as “strong” outnumbered those who viewed their markets

    as “weak.”2 

    2 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.

    68

    49

    45

    0

    20

    40

    60

    80

         2     0     0     8     0     1

         2     0     0     8     0     5

         2     0     0     8     0     9

         2     0     0     9     0     1

         2     0     0     9     0     5

         2     0     0     9     0     9

         2     0     1     0     0     1

         2     0     1     0     0     5

         2     0     1     0     0     9

         2     0     1     1     0     1

         2     0     1     1     0     5

         2     0     1     1     0     9

         2     0     1     2     0     1

         2     0     1     2     0     5

         2     0     1     2     0     9

         2     0     1     3     0     1

         2     0     1     3     0     5

         2     0     1     3     0     9

         2     0     1     4     0     1

         2     0     1     4     0     5

         2     0     1     4     0     9

         2     0     1     5     0     1

         2     0     1     5     0     5

    REALTORS® Confidence Index Current Conditions

    as of July 2015

    (50="Moderate" Conditions)

    Single-family Townhome Condominium

    4

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    REALTORS’® Outlook Over the Next Six Months More Moderate

    In July 2015, REALTORS® were by and large “strongly” confident about the outlook over thenext six months although confidence eased somewhat compared to June.3 In the single-familymarket, the REALTORS® Confidence Index Six-Month Outlook  moderated to 68 after six months

    at over 70 (72 in June 2015; 60 in July 2014). The index for townhomes slid to 51 after sixmonths at over 50 (53 in June 2015; 45 in July 2014). The index for condominiums dipped to 47(49 in June 2015; 40 in July 2014). An index greater than 50 indicates that the number ofrespondents with a “strong” outlook outnumbered those with a “weak” outlook. 

    REALTOR® respondents expressed concern that the steep pace of price appreciation is erodingaffordability. Respondents also expressed concern about the possible adverse effect on markettransactions and closing when the new disclosure r egulations under TILA-RESPA IntegratedDisclosure (TRID) take effect on October 3, 2015. 4 As of July 2015, 89 percent of respondentsreported receiving information from their lender or association about the new regulations. About25 percent of REALTORS® reported that they or their office have not made any effort or don’t

    know of efforts to deal with the impending changes.

    The following maps show the REALTORS® Confidence Index Six-Month Outlook  across property types by state.5 The outlook was most upbeat in states with growing technology sectorssuch as California, Washington, Oregon, and Massachusetts; in states with shale/oil-relatedindustries such as Texas, North Dakota, Montana, Wyoming; and in states that are attracting new

    residents such as Colorado and Florida. Among all property types, the condominium market was

    3 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?”  4 TRID prescribes simplified disclosure forms that the lender needs to deliver to the loan applicant after a loan application isreceived (Loan Estimate) and before a loan is consummated (Disclosure Form) within prescribed business days and waiting

     periods. The objective is to help consumers understand the key features, costs, and risks of the mortgage loan for which they areapplying. See the Consumer Financial Protection Bureau’s guidelines at http://www.consumerfinance.gov/regulatory-implementation/tila-respa/  5 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.

    68

    51

    47

    0

    20

    40

    60

    80

         2     0     0     8     0     1

         2     0     0     8     0     5

         2     0     0     8     0     9

         2     0     0     9     0     1

         2     0     0     9     0     5

         2     0     0     9     0     9

         2     0     1     0     0     1

         2     0     1     0     0     5

         2     0     1     0     0     9

         2     0     1     1     0     1

         2     0     1     1     0     5

         2     0     1     1     0     9

         2     0     1     2     0     1

         2     0     1     2     0     5

         2     0     1     2     0     9

         2     0     1     3     0     1

         2     0     1     3     0     5

         2     0     1     3     0     9

         2     0     1     4     0     1

         2     0     1     4     0     5

         2     0     1     4     0     9

         2     0     1     5     0     1

         2     0     1     5     0     5

    REALTORS® Confidence Index Six-Month Outlook

    as of July 2015

    (50="Moderate" Outlook)

    Single-family Townhome Condominium

    5

    http://www.consumerfinance.gov/regulatory-implementation/tila-respa/http://www.consumerfinance.gov/regulatory-implementation/tila-respa/http://www.consumerfinance.gov/regulatory-implementation/tila-respa/http://www.consumerfinance.gov/regulatory-implementation/tila-respa/http://www.consumerfinance.gov/regulatory-implementation/tila-respa/http://www.consumerfinance.gov/regulatory-implementation/tila-respa/

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    the weakest, with REALTORS® reporting financing issues for both FHA-insured and the GSE- backed loans.6 

    REALTORS® Confidence Index Six-Month Outlook for Single-Family Homes

    May-July 2015

    6 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 NAR Submitted for the Record to the Senate CommitteeHousing and Banking Affairs on December 9, 2014 at http://www.ksefocus.com/billdatabase/clientfiles/172/1/2180.pdf  

    6

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

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    REALTORS® Confidence Index Six-Month Outlook for Townhomes

    May-July 2015

    REALTORS® Confidence Index Six-Month Outlook for Condominiums

    May-July 2015

    7

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    REALTORS® Generally Reported Slower Buyer and Seller Traffic

    REALTORS® generally reported slower buyer and seller traffic in their local mar kets in July2015 compared to June 2015 but better traffic conditions compared to July 2014.7 

    The REALTORS® Buyer Traffic Index dipped to 62 (67 in June 2015; 55 in July 2014).Respondents reported that traffic eased after a robust spring market and that the steep increase in prices appears to be dampening demand.

    The REALTORS® Seller Traffic  Index fell to 46 (48 in June 2015; 45 in July 2014). Theconstruction of new privately owned housing units has been steadily rising, hitting 1.1 millionunits as of the second quarter of 2015, but this is still short of the normal 1.5 million unitsrequired arising from household formation and the replacement of obsolete housing. Moreover,about 40 percent of new construction is of multi-unit structures, generally for rental use.REALTORS® reported low inventory of properties in the lower price range and for those thatare move-in ready.

    In most states, the level of supply, measured by the REALTORS® Seller Traffic Index, is lowcompared to the level of demand, measured by the REALTORS® Buyer Traffic Index. Demandcontinues to outpace supply in states such as California, Washington, Oregon, Nevada, Colorado,Massachusetts, Florida. Meanwhile, supply conditions were reported to be broadly improving inTexas, Utah, North Dakota, South Dakota, Montana, Wyoming, and Utah.

    7 Respondents were asked “How do you rate the past month's traffic in the neighborhood(s) or area(s) where you make most ofyour sales?” The responses were “Strong”, “Moderate,” and “Weak.”

    62

    46

    20

    30

    40

    50

    60

    70

    80

         2     0     0     8     0     1

         2     0     0     8     0     5

         2     0     0     8     0     9

         2     0     0     9     0     1

         2     0     0     9     0     5

         2     0     0     9     0     9

         2     0     1     0     0     1

         2     0     1     0     0     5

         2     0     1     0     0     9

         2     0     1     1     0     1

         2     0     1     1     0     5

         2     0     1     1     0     9

         2     0     1     2     0     1

         2     0     1     2     0     5

         2     0     1     2     0     9

         2     0     1     3     0     1

         2     0     1     3     0     5

         2     0     1     3     0     9

         2     0     1     4     0     1

         2     0     1     4     0     5

         2     0     1     4     0     9

         2     0     1     5     0     1

         2     0     1     5     0     5

    REALTORS® Buyer and Seller Traffic Indeces as of July 2015

    (50="Moderate" Conditions)

    Buyer Traffic Index Seller Traffic Index

    8

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    REALTORS® Buyer Traffic Index

    May-July 2015

    REALTORS® Seller Traffic Index

    May-July 2015

    9

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     NAR also tracks the number of properties shown by REALTORS® based on data available fromSentrilock, LLC data. Foot traffic stayed at about the same level in July 2015 as in June.Although showings do not necessarily translate into sales, foot traffic has a strong correlation

    with future contracts and home sales.

    8

     

    70 Percent of REALTORS® Reported Higher Prices from a Year Ago

    Home prices have risen at an increasingly faster pace in 2015. Seventy percent of respondentsreported rising prices compared to only 43 percent in December 2014 (61 percent in June 2015;65 percent in July 2014). REALTORS® reported that the sharp price increase has made homesunaffordable for many. As sellers find fewer buyers, homes are starting to sell at a discountcompared to the listing price. About 12 percent of homes sold at a premium compared to 16 percent in June 2015.

    8 For more information on the Foot Traffic Index based on Sentrilock, LLC data, please visit:http://www.realtor.org/infographics/foot-traffic  

    10

    http://www.realtor.org/infographics/foot-traffichttp://www.realtor.org/infographics/foot-traffichttp://www.realtor.org/infographics/foot-traffic

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    The median price of all existing homes sold in the U.S. as of June 2015 was $236,400, anincrease of six percent on an annual basis. Nationally, the median prices of all existing homeshas now surpassed the peak price of $230,400, registered in July 2006. Strong demand amid tight

    supply has pushed up prices. While rising prices are lifting homeowners out of negative equity,the strong price recovery amid modest growth in incomes is also making homes less affordableand dampening demand. Still, homes are generally affordable: NAR estimates that in June 2015,the median family income of $66,637 was higher than the necessary qualifying income to purchase a house of $43,536.

    70%

    10%

    20%

    0%

    10%

    20%

    30%

    40%

    50%60%

    70%

    80%

         2     0     1     2     0     3

         2     0     1     2     0     5

         2     0     1     2     0     7

         2     0     1     2     0     9

         2     0     1     2     1     1

         2     0     1     3     0     1

         2     0     1     3     0     3

         2     0     1     3     0     5

         2     0     1     3     0     7

         2     0     1     3     0     9

         2     0     1     3     1     1

         2     0     1     4     0     1

         2     0     1     4     0     3

         2     0     1     4     0     5

         2     0     1     4     0     7

         2     0     1     4     0     9

         2     0     1     4     1     1

         2     0     1     5     0     1

         2     0     1     5     0     3

         2     0     1     5     0     5

         2     0     1     5     0     7

    Percentage Distribution of Price Change from a Year Ago

    Reported by REALTOR® Respondents as of July 2015

    Higher Lower Unchanged

    12%

    0%

    5%

    10%

    15%

    20%

    25%

         2     0     1     2     1     2

         2     0     1     3     0     2

         2     0     1     3     0     4

         2     0     1     3     0     6

         2     0     1     3     0     8

         2     0     1     3     1     0

         2     0     1     3     1     2

         2     0     1     4     0     2

         2     0     1     4     0     4

         2     0     1     4     0     6

         2     0     1     4     0     8

         2     0     1     4     1     0

         2     0     1     4     1     2

         2     0     1     5     0     2

         2     0     1     5     0     4

         2     0     1     5     0     6

    Percent of Properties Sold at a Net Premium from the Listing

    Price Reported By REALTORS® as of July 2015

    11

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    REALTORS® Expect Prices to Increase Modestly in Next 12 Months

    REALTORS® who responded to the July 2015 survey expect prices to increase by 3.6 percentover the next 12 months (3.4 percent in June 2015; 3.4 percent in July 2014).9 

    Since all real estate is local, price expectation varied across local markets and states. The mapshows the median expected price change in the next 12 months for each state based on the May– July 2015 RCI surveys.10 REALTOR® respondents from Colorado and Florida had the mostupbeat price expectations, with a median expected price growth in the range of five to six percent. In Washington, Oregon, Nevada, Texas, and Georgia, the median expected pricegrowth was four to five percent. Prices are expected to increase at a modest pace of less thanthree percent in many Northeast states.

    Median Expected Price Change of REALTORS® in Next 12 Months, By State

    May-July 2015

    9 A comparison of the expected price growth for the next 12 months compared to the actual price growth shows the expected price growth to be more conservative than the actual price growth, but both are generally headed in the same direction.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.  

    12

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    Properties Stayed on the Market Longer at 42 Days

    With demand easing, properties that closed in July 2015 were typically on the market for at 42days (34 days in June 2015; 48 days in July 2014).11 Days on market typically increase after Junedue to seasonality effects.

    Short sales were on the market for the longest time at 135 days, while foreclosed propertiestypically stayed on the market at 49 days. Non-distressed properties were on the market at 41days.

    Approximately 43 percent of properties were on the market for less than a month when sold (47 percent in June 2015; 40 percent in July 2014).

    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.

    0

    50

    100

    150

    200

         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

    Median Days on Market of Sales Reported By REALTOR®

    Respondents as of July 2015

    All Foreclosed Short Sales Not Distressed

    All: 42 Foreclosed: 49 Shortsale: 135 Not distressed: 41

    43%

    18%13%

    8%4% 4% 3% 3% 4%

    0%

    10%

    20%

    30%

    40%

    50%

    =12

    mos

    Percentage Distribution of Time on Market of Sales

    Reported by REALTOR® Respondents as of July 2015

    201407 201506 201507

    13

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    Properties typically sold within a month in Washington, Oregon, California, Utah, Colorado, North Dakota, Kansas, Texas, Michigan, Massachusetts, and the District of Columbia. All realestate is local. State-level data is provided for REALTORS® who may want to compare localmarkets against the state and national summary.

    Median Days on Market for Sales Reported by REALTORS®, By State

    May-July 2015

    14

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    II. Buyer and Seller Characteristics

    Sales to First-Time Buyers: 28 Percent of Sales

    First-time home buyers accounted for 28 percent of existing home sales in July 2015 (30 percentin June 2015; 29 percent in July 2014).12 REALTORS® reported that homes are increasingly becoming unaffordable and that sellers are reluctant to move because they can’t find affordablehomes. Home prices have been rising faster than the annual growth in median household incomeof about two percent annually. As of June 2015, home prices were up at six percent annually.Price growth appears to be decelerating after hitting a nine percent annual growth in April 2015.

    12 First-time buyers accounted for about 33 percent of all home buyers based on data from NAR’s 2014  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.

    28%

    0%

    10%

    20%

    30%

    40%

    50%

    60%

         2     0     0     8     1     0

         2     0     0     9     0     2

         2     0     0     9     0     6

         2     0     0     9     1     0

         2     0     1     0     0     2

         2     0     1     0     0     6

         2     0     1     0     1     0

         2     0     1     1     0     2

         2     0     1     1     0     6

         2     0     1     1     1     0

         2     0     1     2     0     2

         2     0     1     2     0     6

         2     0     1     2     1     0

         2     0     1     3     0     2

         2     0     1     3     0     6

         2     0     1     3     1     0

         2     0     1     4     0     2

         2     0     1     4     0     6

         2     0     1     4     1     0

         2     0     1     5     0     2

         2     0     1     5     0     6

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

    15

    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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    Buyers age 34 and under accounted for 27 percent of sales reported by the respondents,essentially unchanged compared to the past months.

    Renters accounted for 37 percent of sales, essentially unchanged compared to a year ago.

    Although rents are rising faster than mortgage payments, the rentership rate has remainedelevated, likely due to a mix of factors related to lifestyle choice, household formation, financialconstraints for younger households, and tighter underwriting standards.

    6%

    2%

    -20%

    -15%

    -10%

    -5%

    0%

    5%

    10%

    15%

    20%

         2     0     0     0     0     1

         2     0     0     0     0     9

         2     0     0     1     0     5

         2     0     0     2     0     2

         2     0     0     2     1     0

         2     0     0     3     0     5

         2     0     0     4     0     1

         2     0     0     4     0     9

         2     0     0     5     0     5

         2     0     0     6     0     1

         2     0     0     6     0     9

         2     0     0     7     0     5

         2     0     0     8     0     1

         2     0     0     8     0     9

         2     0     0     9     0     5

         2     0     1     0     0     1

         2     0     1     0     0     9

         2     0     1     1     0     5

         2     0     1     2     0     1

         2     0     1     2     0     9

         2     0     1     3     0     5

         2     0     1     4     0     1

         2     0     1     4     0     9

         2     0     1     5     0     5

    Year-on-year Percent Change in Median Home Price and

    Median Household Income

    NAR Median Price, Existing Home Sales Median Household Income

    26% 25% 24% 28% 24% 29% 29% 28% 31% 26% 27% 28% 31% 28% 29% 28% 27%

    52% 49% 53% 46% 51% 47% 48% 47%46% 50% 50% 50% 48% 52% 50% 50% 49%

    22% 26% 23% 26% 25% 24% 23% 25% 24% 23% 23% 23% 21% 20% 21% 22% 23%

    0%

    10%

    20%

    30%

    40%

    50%

    60%

    70%

    80%

    90%

    100%

         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

    Age Distribution of Buyers for Sales Reported by REALTOR®

    Respondents as of July 2015

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

    16

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    Sales data compiled for the January-July 2015 timeframe showed that among buyers 34 yearsand under, 86 percent purchased single-family homes, compared to the 77 percent rate for buyers56 years and older. REALTORS® have also reported a demand for 55 and older communityhousing as the large baby boomer population continues to move into retirement.

    Sales for Investment Purposes: 13 Percent of Sales

    Approximately 13 percent of REALTORS® reported that their last sale was for investment purposes (12 percent in June 2015; 16 percent in July 2014). Purchases for investment purposeshave 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.

    36% 38% 37% 38% 37% 38% 38% 41% 39% 40% 40% 37%

    55% 54% 54% 53% 54% 53% 53% 51% 54% 52% 52% 55%

    9% 9% 9% 9% 9% 9% 9% 8% 7% 8% 8% 8%

    0%

    20%

    40%

    60%

    80%

    100%

         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

    Living Status of Home Buyers at Time of Home Purchase of

    Sales Reported by REALTORS® as of July 2015

    Lives with parents, relatives, or friends

    Lives in own home

    Rents an apartment or house

    86% 86%77% 84%

    7% 6%7%

    6%7% 8% 16% 9%

    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 as of

    July 2015

    Single-family Townhome Condominium

    17

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    Distressed Sales: Seven Percent of Sales

    With rising home values and fewer foreclosures, the share of sales of distressed propertiescontinued to decline. In July 2015, distressed sales accounted for seven percent of sales (8 percent in June 2015; 9 percent in July 2014). About five percent of reported sales wereforeclosed properties, and about two percent were short sales.13 Distressed sales accounted forabout a third to a half of sales until 2011. Distressed sales have fallen with fewer properties inforeclosure (840,217 properties in the foreclosure inventory as of the second quarter of 2015from a peak of two million properties in 2009-2010).14 Fewer distressed sales and foreclosuresimproves home values, creating more home equity for the homeowner. Foreclosed propertiessold at an average discount of 17 percent in July 2015. Properties sold as short sales sold at anaverage discount of 12 percent.

    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. 

    13%

    0%

    5%

    10%

    15%

    20%

    25%

    30%

         2     0     0     8     1     0

         2     0     0     9     0     2

         2     0     0     9     0     6

         2     0     0     9     1     0

         2     0     1     0     0     2

         2     0     1     0     0     6

         2     0     1     0     1     0

         2     0     1     1     0     2

         2     0     1     1     0     6

         2     0     1     1     1     0

         2     0     1     2     0     2

         2     0     1     2     0     6

         2     0     1     2     1     0

         2     0     1     3     0     2

         2     0     1     3     0     6

         2     0     1     3     1     0

         2     0     1     4     0     2

         2     0     1     4     0     6

         2     0     1     4     1     0

         2     0     1     5     0     2

         2     0     1     5     0     6

    Sales to Investors as Percent of Market as of July 2015

    0%

    10%

    20%

    30%

    40%

    50%

    60%

         2     0     0     8     1     0

         2     0     0     9     0     2

         2     0     0     9     0     6

         2     0     0     9     1     0

         2     0     1     0     0     2

         2     0     1     0     0     6

         2     0     1     0     1     0

         2     0     1     1     0     2

         2     0     1     1     0     6

         2     0     1     1     1     0

         2     0     1     2     0     2

         2     0     1     2     0     6

         2     0     1     2     1     0

         2     0     1     3     0     2

         2     0     1     3     0     6

         2     0     1     3     1     0

         2     0     1     4     0     2

         2     0     1     4     0     6

         2     0     1     4     1     0

         2     0     1     5     0     2

         2     0     1     5     0     6

    Distressed Sales, As Percent of Sales Reported by

    REALTOR® Respondents as of July 2015

    Foreclosed Short Sale

    Foreclosed: 5% Short sale: 2%

    18

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    Cash Sales: 23 Percent of Sales

    The share of cash sales to the market has declined compared to the levels in 2010-2014, but theshare remains elevated compared to levels before the housing downturn. Approximately 23 percent of sales were all-cash (22 percent in June 2015; 29 percent in July 2014). Buyers ofhomes for investment purposes, second homes, and foreign clients are more likely to pay cashthan first-time home buyers. As sales to investors and distressed properties have fallen, the shareof cash sales has declined as well.

    17%

    12%

    0%

    5%

    10%

    15%

    20%

    25%

         2     0     0     9     0     2

         2     0     0     9     0     6

         2     0     0     9     1     0

         2     0     1     0     0     2

         2     0     1     0     0     6

         2     0     1     0     1     0

         2     0     1     1     0     2

         2     0     1     1     0     6

         2     0     1     1     1     0

         2     0     1     2     0     2

         2     0     1     2     0     6

         2     0     1     2     1     0

         2     0     1     3     0     2

         2     0     1     3     0     6

         2     0     1     3     1     0

         2     0     1     4     0     2

         2     0     1     4     0     6

         2     0     1     4     1     0

         2     0     1     5     0     2

         2     0     1     5     0     6

    Mean Percentage Price Discount of Distressed Sales Reported

    by REALTOR® Respondents as of July 2015

    Foreclosed Short sale

    23%

    0%

    5%

    10%

    15%

    20%

    25%

    30%

    35%

    40%

         2     0     0     8     1     0

         2     0     0     9     0     2

         2     0     0     9     0     6

         2     0     0     9     1     0

         2     0     1     0     0     2

         2     0     1     0     0     6

         2     0     1     0     1     0

         2     0     1     1     0     2

         2     0     1     1     0     6

         2     0     1     1     1     0

         2     0     1     2     0     2

         2     0     1     2     0     6

         2     0     1     2     1     0

         2     0     1     3     0     2

         2     0     1     3     0     6

         2     0     1     3     1     0

         2     0     1     4     0     2

         2     0     1     4     0     6

         2     0     1     4     1     0

         2     0     1     5     0     2

         2     0     1     5     0     6

    Cash Sales as Percent of Market as of July 2015

    19

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    Among mortgage sales reported by the respondents, 39 percent had a downpayment of at least 20 percent, about the same since 2011 when NAR started collecting this data. Among mortgagesales for first-time home buyers, 66 percent had downpayment terms of zero to six percent, downfrom 77 percent of in 2009. The decreased share of low downpayment loans is one indicator thataccess to credit has become more difficult for borrowers who cannot afford to put in a higherdownpayment.

    75%

    64%

    60%52%

    16%

    7%

    0%

    10%

    20%

    30%

    40%

    50%

    60%

    70%

    80%

    International Investor Distressed

    Sale

    Second

    home

    Relocation First-time

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

    in July 2015

    39%

    0%

    5%

    10%

    15%

    20%

    25%

    30%

    35%

    40%

    45%

    50%

         2     0     1     1     0     4

         2     0     1     1     0     6

         2     0     1     1     0     8

         2     0     1     1     1     0

         2     0     1     1     1     2

         2     0     1     2     0     2

         2     0     1     2     0     4

         2     0     1     2     0     6

         2     0     1     2     0     8

         2     0     1     2     1     0

         2     0     1     2     1     2

         2     0     1     3     0     2

         2     0     1     3     0     4

         2     0     1     3     0     6

         2     0     1     3     0     8

         2     0     1     3     1     0

         2     0     1     3     1     2

         2     0     1     4     0     2

         2     0     1     4     0     4

         2     0     1     4     0     6

         2     0     1     4     0     8

         2     0     1     4     1     0

         2     0     1     4     1     2

         2     0     1     5     0     2

         2     0     1     5     0     4

         2     0     1     5     0     6

    Percent of Mortgage Sales With Downpayment ofAt Least 20 Percent as of July 2015

    20

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    International Transactions: Less than One Percent of Residential Market

    Less than one percent percent of respondents reported their last sale was a purchase by aforeigner not residing in the U.S. International buyers frequently pay cash and have typically purchased properties above the market median price. Based on NAR’s 2015 Profile of Homebuying Activity of International Clients, Florida, California, Texas, and Arizona are themajor destinations.

    66%

    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

    Percent of First-time Buyers Obtaining a Mortgage Who Had a

    Down Payment of 0% to 6% as of July 2015*

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

    0.8%

    0.0%

    0.5%

    1.0%

    1.5%

    2.0%

    2.5%

    3.0%

    3.5%

    4.0%

         2     0     1     0     0     3

         2     0     1     0     0     6

         2     0     1     0     0     9

         2     0     1     0     1     2

         2     0     1     1     0     3

         2     0     1     1     0     6

         2     0     1     1     0     9

         2     0     1     1     1     2

         2     0     1     2     0     3

         2     0     1     2     0     6

         2     0     1     2     0     9

         2     0     1     2     1     2

         2     0     1     3     0     3

         2     0     1     3     0     6

         2     0     1     3     0     9

         2     0     1     3     1     2

         2     0     1     4     0     3

         2     0     1     4     0     6

         2     0     1     4     0     9

         2     0     1     4     1     2

         2     0     1     5     0     3

         2     0     1     5     0     6

    Sales to International Clients as Percent of Marketas of July 2015

    21

    http://www.realtor.org/reports/profile-of-international-home-buying-activityhttp://www.realtor.org/reports/profile-of-international-home-buying-activityhttp://www.realtor.org/reports/profile-of-international-home-buying-activityhttp://www.realtor.org/reports/profile-of-international-home-buying-activityhttp://www.realtor.org/reports/profile-of-international-home-buying-activityhttp://www.realtor.org/reports/profile-of-international-home-buying-activity

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    Rents Continue to Increase

    REALTORS® reported that rents continue to increase. About 67 percent of REALTORS®reported rising rent (61 percent in June 2015; 52 percent in July 2014). Rising rents indicatecontinued strong demand for rental properties. Although rents are rising faster than mortgage

     payments, the rentership rate has remained elevated, likely due to a mix of factors such aslifestyle choice, financial constraints for younger households, and tight underwriting standards.Renter housholds are able to increase their wealth thr ough home equity gains over time.Homeowners have net worth 39 times that of renters.15 

    15 2013 Survey of Consumer Finances, Federal Reserve Board of New York. This is the most recent survey. In 2013, the median

    net worth of homeowners was $195,400, while the median net worth of renters was $5,400.

    67%

    0%

    10%

    20%

    30%

    40%

    50%

    60%

    70%

         2     0     1     0     1     2

         2     0     1     1     0     3

         2     0     1     1     0     6

         2     0     1     1     0     9

         2     0     1     1     1     2

         2     0     1     2     0     3

         2     0     1     2     0     6

         2     0     1     2     0     9

         2     0     1     2     1     2

         2     0     1     3     0     3

         2     0     1     3     0     6

         2     0     1     3     0     9

         2     0     1     3     1     2

         2     0     1     4     0     3

         2     0     1     4     0     6

         2     0     1     4     0     9

         2     0     1     4     1     2

         2     0     1     5     0     3

         2     0     1     5     0     6

    Percent of REALTOR® Respondents Reporting Rising Rent

    Levels Compared to 12 Months Ago as of July 2015

    106

    145

    50

    70

    90

    110

    130

    150

    170

         2

         0     0     0     Q     1

         2

         0     0     0     Q     4

         2

         0     0     1     Q     3

         2

         0     0     2     Q     2

         2

         0     0     3     Q     1

         2

         0     0     3     Q     4

         2

         0     0     4     Q     3

         2

         0     0     5     Q     2

         2

         0     0     6     Q     1

         2

         0     0     6     Q     4

         2

         0     0     7     Q     3

         2

         0     0     8     Q     2

         2

         0     0     9     Q     1

         2

         0     0     9     Q     4

         2

         0     1     0     Q     3

         2

         0     1     1     Q     2

         2

         0     1     2     Q     1

         2

         0     1     2     Q     4

         2

         0     1     3     Q     3

         2

         0     1     4     Q     2

         2

         0     1     5     Q     1

    Rent Growth Has Outpaced Mortgage Payment GrowthSince 2000 (2000Q1=100)

    Mortgage Payment (2000Q1=100) CPI-Shelter Index (2000Q1=100)

    Source: NAR, BLS downloaded on Haver Analytics

    22

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    III. Current Issues

    Credit Conditions

    REALTORS® have reported that credit conditions remain generally tight, with significant loan

     processing delays. One indicator of credit tightness is the distribution of FICO scores onapproved loans.

    About 52 percent of REALTORS® providing transaction credit score information reported FICOcredit scores in the range of 740+. For comparison, in the period 1999-2004, only 37 percent ofFannie Mae’s and 33 percent of Freddie Mac’s 30-year, fixed rate, fully amortizing loans hadFICO scores greater than 750.16 

    Among first-time home buyers, 69 percent of buyers were reported to have FICO scores of 740or higher. Among buyers age 34 years and under, 64 percent had FICO scores of 700 or over.Borrowers with FICO scores of 740+ put in a higher downpayment while the majority of borrowers with FICO scores of less than 740 availed of “low” downpayment loans (zero to six percent). For example, 74 percent of borrowers with FICO scores of below 620 made a down payment of zero to six percent.

    16 Source: Urban Institute Housing Finance Policy Center, “Housing Finance at a Glance”, May 2015 chartbook.

    http://www.urban.org/sites/default/files/alfresco/publication-pdfs/2000231-Housing-Finance-At-A-Glance-Monthly-Chartbook-May-2015.pdf  

    1%

    47%

    52%

    0%

    10%

    20%

    30%

    40%

    50%

    60%

    70%

         2     0     1     2     0     2

         2     0     1     2     0     4

         2     0     1     2     0     6

         2     0     1     2     0     8

         2     0     1     2     1     0

         2     0     1     2     1     2

         2     0     1     3     0     2

         2     0     1     3     0     4

         2     0     1     3     0     6

         2     0     1     3     0     8

         2     0     1     3     1     0

         2     0     1     3     1     2

         2     0     1     4     0     2

         2     0     1     4     0     4

         2     0     1     4     0     6

         2     0     1     4     0     8

         2     0     1     4     1     0

         2     0     1     4     1     2

         2     0     1     5     0     2

         2     0     1     5     0     4

         2     0     1     5     0     6

    Percentage Distribution of FICO Scores Reported by

    REALTOR® Respondents as of July 2015

    < 620 620-740 740+

    23

    http://www.urban.org/sites/default/files/alfresco/publication-pdfs/2000231-Housing-Finance-At-A-Glance-Monthly-Chartbook-May-2015.pdfhttp://www.urban.org/sites/default/files/alfresco/publication-pdfs/2000231-Housing-Finance-At-A-Glance-Monthly-Chartbook-May-2015.pdfhttp://www.urban.org/sites/default/files/alfresco/publication-pdfs/2000231-Housing-Finance-At-A-Glance-Monthly-Chartbook-May-2015.pdfhttp://www.urban.org/sites/default/files/alfresco/publication-pdfs/2000231-Housing-Finance-At-A-Glance-Monthly-Chartbook-May-2015.pdfhttp://www.urban.org/sites/default/files/alfresco/publication-pdfs/2000231-Housing-Finance-At-A-Glance-Monthly-Chartbook-May-2015.pdf

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    3%

    17%24%

    25%31%

    1%7%

    14%

    22%

    56%

    0%

    10%

    20%

    30%

    40%

    50%

    60%

    below 620 620-659 660-699 700-739 740+

    Percentage Distribution of FICO Credit Scores for First-

    time and Non-first- time Buyers Reported by REALTORS®

    in Jan-July 2015

    Yes No

    2% 2% 1%

    14%11%

    5%

    20% 18%

    10%

    27%22%

    15%

    37%

    47%

    69%

    0%

    10%

    20%

    30%

    40%

    50%

    60%

    70%

    80%

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

    Percentage Distribution of FICO Scores , By Age Group, Based onMortgage Sales Reported by REALTORS® in Jan-July 2015

    below 620 620-659 660-699 700-739 740+

    74%91%

    81%66%

    45%

    7%3%

    8%12%

    12%

    7%

    3%3%

    5%

    7%

    13%3%

    8%17%

    36%

    0%

    20%

    40%

    60%

    80%

    100%

    below 620 620-659 660-699 700-739 740+

       P   e   r   c   e   n   t   o    f    b   u

       y   e   r   s

    FICO Score Range

    Distribution of Downpayment Terms by Credit Scores as

    Reported by REALTORS® for Homebuyers Who Purchased

    Property in Jan-July 2015

    0-6% Downpayment 7-10% Downpayment

    11-19% Downpayment 20-99% Downpayment

    24

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    Contract Settlement Issues

    In reporting on their last contract that went into settlement or was terminated over the periodMay-July 2015, REALTORS® reported that 65 percent of contracts were settled on time, 29 percent had delayed settlement, and six percent were terminated.

    Of all contracts settled/terminated, 49 percent faced some type of issue: 18 percent had financingissues, 13 percent had appraisal issues, and 10 percent had home inspection issues.

    Among contracts that had a delayed settlement (29 percent), financing issues were the primarycause of contract delays at 47 percent.

    Among contracts that were terminated (six percent), home inspection and financing issues werethe major causes at 29 percent and 27 percent respectively.

    65% 67% 65% 64% 63% 63% 65%

    26% 27% 26% 26% 28% 29% 29%

    8% 7% 9% 10% 9% 7% 6%

    0%10%20%30%40%50%60%70%80%90%

    100%

    How Sales Contracts Were Settled

    Contract was terminated

    Contract was delayed but eventually went into settlement

    Contract was settled on time

    * Based on the most recent contract that w ent into settlement or was terminated during this

     period.

    25

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    51%

    18%

    13%

    10%

    4%

    4%

    2%

    2%

    1%

    10%

    No problems encountered

    Issues related to obtaining financing

    Appraisal issues

    Home inspection/environmental issues

    Titling/deed issues

    Contingencies stated in the contract

    Issues in buy/sell distressed property

    Home/hazard/flood insurance issues

     Buyer lost job

    Other

    Problems Encountered for Contracts That Went Into Settlement or

    Were Terminated in May-July 2015 *

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

    seller backing out, builder delays, HOA issues, pricing issues, etc.

    47%

    23%

    13%

    10%

    7%

    4%

    3%

    1%

    19%

    Issues related to obtaining financing

    Appraisal issues

    Home inspection/environmental issues

    Titling/deed issues

    Contingencies stated in the contract

    Issues in buy/sell distressed property

    Home/hazard/flood insurance issues

     Buyer lost job

    Other

    Problems Encountered for Contracts That Were Delayed But Eventually

    Went Into Settlement in May-July 2015

    (Delayed Contracts Represent 29 Percent of Closed or Terminated Contracts)

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

    seller backing out, builder delays, HOA issues, pricing issues, documentation issues, etc.

    26

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    29%

    27%

    15%

    5%

    5%

    4%

    3%

    1%

    25%

    Home inspection/environmental issues

    Issues related to obtaining financing

    Appraisal issues

    Issues in buy/sell distressed property

    Contingencies stated in the contract

    Titling/deed issues

     Buyer lost job

    Home/hazard/flood insurance issues

    Other

    Problems Encountered for Contracts That Were Terminated in

    May-July 2015

    (Terminated Contracts Represent 6 Percent of Closed or Terminated Contracts)

    *Will not sum to 1 00 percent because multiple responses are allowed. "Other" includes buyer or

    seller backing out, builder delays, HOA issues, pricing issues, documentation issues, 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 ASSOCIATION of   REALTORS®Research Division500 New Jersey Avenue, NWWashington, DC 20001202.383.1000

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