Clients’ ability to secure financing remains tight
WALTHAM, Mass. – June 20, 2013 – The Massachusetts Association of REALTORS® (MAR) reported today that the May REALTOR® Market Confidence Index (RMCI) and the May REALTOR® Price Confidence Index (RPCI) were both over the 80-point mark for the first time. REALTORS® report that their clients’ ability to secure financing has stayed the same or is more difficult than the same time last year.
“The confidence of our REALTOR® members who participate in this survey has come a long way since the all-time low 13.42 back in December 2008,” said 2013 MAR President Kimberly Allard-Moccia, broker-owner of Century21 Professionals in Braintree. “It is encouraging that strong activity in the market exists while REALTORS® report that the ability of their clients to secure financing generally remains as tight or tighter than last year.”
In May 2013, the REALTOR® Market Confidence Index was 83.08, which was up 38 percent from the May 2012 score of 60.38. This is the fifth straight all-time high for the RMCI, the 22nd straight month of year-over-year increases and first time over the 80-point mark. On a month-to-month basis, the May RMCI was UP five percent from the 79.14 score in April 2013. Measured on a 100-point scale, a score of 50 is the midpoint between a “strong” (100 points) and a “weak” (0 points) market condition.
The REALTOR® Price Confidence Index was 81.95 in May, another new high and the second straight time the Index has broken the 80-point mark. The Index was up 31 percent from the May 2012 RPCI of 62.38. This is the 16th straight month of year-over-year increases. On a month-to-month basis, the RPCI was essentially flat as it was up less than one percent from the April 2013 RPCI of 81.47.
REALTOR®-members were asked to describe their clients’ ability to secure financing in the current lending environment compared to the same time last year. Of those REALTORS® who responded to the survey, 48 percent answered the ability to secure financing has remained the same as last year. Forty-one percent answered it was either significantly more difficult (9%) or somewhat more difficult (32%) for their clients to secure financing compared to the same time last year. Twelve percent answered it was either somewhat easier (10%) or significantly easier (2%) for their clients to secure financing compared to the same time last year.
About the REALTOR® Index Methodology:
The Massachusetts REALTOR® Market Confidence Index (RMCI) and Price Confidence Index (RPCI) are based on monthly responses from a random sampling of Massachusetts Association of REALTORS® members on the state of the housing market. More specifically, the survey asks members two basic questions pertaining to the real estate business in their market area in Massachusetts.
1. How would you describe the current housing market?
2. What are your expectations of home prices over the next year?
In addition to these standard questions, the survey each month includes one wildcard question that changes each month and is based on an industry hot topic.
The RMCI is calculated in the following way. Respondents indicate whether conditions are, or are expected to be “strong” (100 points), “moderate” (50 points), and “weak” (0 points). The results are the average score for each question. A score of 50 is the threshold between a “strong” and a “weak” condition. Similarly, the question about home prices over the next year (REALTOR® Price Confidence Index) is calculated using five categories: “Rise 0-5%” (75 points), “Rise 5%+” (100 points), “Level” (50 points), “Fall 0-5%” (25 points), and “Fall >5%” (0 points).
About the Massachusetts Association of REALTORS®:
Organized in 1924, the Massachusetts Association of REALTORS® is a professional trade organization with more than 19,000 members. The term REALTOR® is registered as the exclusive designation of members of the National Association of REALTORS® who subscribe to a strict code of ethics and enjoy continuing education programs.
*Please note, starting with the release of the September 2012 Index data, the REALTOR® Market Index will be renamed the REALTOR® Market Confidence Index and the REALTOR® Price Index will be renamed the REALTOR® Price Confidence Index.
Editors and reporters: Please note that the term Realtor is properly spelled with an initial capital “R”, per the Associated Press Stylebook.