Navigating the Real Estate Landscape: Key Insights from the NAR REALTORS® Confidence Index Report for December 2023

The latest REALTORS® Confidence Index report for December 2023 provides a comprehensive overview of the current real estate market, offering valuable insights for both home buyers and sellers. Let's delve into the key findings, shedding light on market trends, buyer and seller expectations, and the evolving dynamics that shape the real estate landscape.

1. Positive Outlook for Buyer and Seller Traffic:
Buyer and seller confidence gained momentum in December, with 33% of respondents anticipating a year-over-year increase in buyer traffic in the next three months. Seller traffic expectations also rose to 25%, reflecting a positive shift in market sentiment.

2. Supply and Demand Dynamics:
Despite limited housing supply, the report notes that 16% of homes were still sold above list price. The demand for homes remains robust, with a majority of properties (56%) selling in less than one month. Homes listed received an average of 2.4 offers, emphasizing the competitive nature of the market.

3. Impact of Technology on Home Purchases:
The use of technology in real estate transactions continues to grow, with 9% of buyers making a home purchase based solely on a virtual tour, showing, or open house without physically visiting the property. This reflects an increase from both the previous month and the same period last year.

4. Contract Closures and Challenges:
While the average contract closure time remained consistent at 30 days, some faced delays or termination. Contract terminations and delayed settlements each accounted for 5% and 16%, respectively, with 6% citing appraisal issues as the cause for delays.

5. Changing Trends Among Buyers:
First-time buyers represented 29% of buyers, a slight decrease from the previous month. Additionally, there was a shift in the purpose of home purchases, with 16% for non-primary residence use and 5% for vacation use. The percentage of sales to iBuyers decreased slightly.

6. Competitive Contract Activity:
The report highlights the competitive nature of contract activities, with 29% of buyers opting for all-cash sales, 24% waiving the inspection contingency (an increase from the previous month), and 15% waiving the appraisal contingency (a decrease from the previous month).

7. Urban Exodus Continues:
Buyers are still showing a preference for properties outside of city centers, with 85% of their activity focused in these areas.

The REALTORS® Confidence Index report paints a dynamic picture of the real estate market in December 2023. As we navigate these trends, both buyers and sellers should stay informed and agile to make the most of the evolving market conditions. Whether you are entering the market or considering a sale, understanding these insights can empower you to make informed decisions in the ever-changing world of real estate.

In another positive development for the housing market, mortgage rates have recently experienced a decrease, marking their lowest level since May of 2023. This decline in mortgage rates is especially encouraging for first-time homebuyers, who tend to be more sensitive to changes in housing affordability. While this presents an advantageous opportunity for potential buyers, the thawing purchase demand adds pressure to an already depleted inventory for sale. Striking a balance between favorable mortgage rates and addressing the challenges posed by limited housing supply becomes crucial in navigating the evolving real estate landscape.

Read the full NAR REALTORS® Confidence Index

Review the Highlights From the Profile of Home Buyers and Sellers

About NAR

The National Association of REALTORS® is America's largest trade association, representing more than 1.5 million members involved in all aspects of the residential and commercial real estate industries. The term REALTOR® is a registered collective membership mark that identifies a real estate professional who is a member of the National Association of REALTORS® and subscribes to its strict Code of Ethics.

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