The information provided by REALTORS® about local market conditions in December 2014 indicated a broad uptick in confidence and market activity compared to that in November 2014, according to the December 2014 REALTORS® Confidence Index Survey.
REALTORS® were also more optimistic about the outlook for the next six months. An improving jobs market, the decline in the 30-year fixed mortgage rate to slightly less than 4 percent since October 2014, and recent measures such as the 0.5 percentage point reduction in monthly mortgage insurance premiums for FHA-insured loans and acceptance of GSEs (Fannie Mae and Freddie Mac) of originated loans with 3 percent down payment may be underpinning this increased optimism. Optimism also picked up in anticipation of the seasonal uptick in the spring season.
Lower interest rates appeared to have steered investors back into the market. The share of investors accounted for a slightly higher share of the market, at 17 percent. The share of first-time homebuyers slightly dipped to 29 percent.
The impact of lower oil prices on housing is generally positive, putting more money into consumers’ pockets and creating a downward pressure on interest rates. However, REALTORS® in states with greater dependence on the oil and gas industry cautioned about the adverse effect of the continued drop in oil prices.