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REALTOR® Price Confidence Index remains historically high in April despite year-over-year drop

by Eric Berman | May 21, 2014
Nearly half of the REALTOR®-members who responded to survey believe financing for clients is more difficult to access than last year

WALTHAM, Mass. - May 20, 2014 – The Massachusetts Association of REALTORS® (MAR) reported today that the April REALTOR® Market Confidence Index (RMCI) was down for the sixth straight month. While strong in April, the REALTOR® Price Confidence Index (RPCI) decreased for the first time in 26 months. The results of the April “Hot Topic” question showed that over 45 percent of REALTOR®-members who responded, reported that financing is more difficult to access than it was a year ago.

“A drop in price confidence could indicate that the inventory of homes for sale is starting to move in a positive direction for homebuyers,” said 2014 MAR President Peter Ruffini, regional vice president at Jack Conway & Co. “However, if financing continues to be difficult for buyers to obtain, an increase in inventory may not result in an increase in sales.”

In April 2014, the REALTOR® Market Confidence Index was 66.89, which was down 16 percent from the April 2013 score of 79.14. This is the sixth straight month that the RMCI has gone down. On a month-to-month basis, the April RMCI was down four percent from the 69.50 score in March 2014. This is the third straight month that the RMCI has been over the 60-point mark since October 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 77.81 in April, down five percent from the April 2013 RPCI of 81.47. This is the first decrease in the Index after 26 straight months of year-over-year gains. However, this is the 14th straight month over the 70-point mark. On a month-to-month basis, the RPCI was down two percent from the March 2014 RPCI of 79.69.

The monthly “Hot Topic” question asked REALTOR®-members to compare their clients’ ability to secure financing in the current lending environment against the same time last year. Of those members who responded, 46 percent reported their clients’ access to financing was either significantly more difficult (9.3%) or somewhat more difficult (37.7%) compared to the same time last year. Forty-four percent reported no change from last year, while nine percent reported that access to financing was either somewhat easier (8.6 percent) or significantly easier (0.7%).

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.


Editors and reporters: Please note that the term Realtor is properly spelled with an initial capital “R”, per the Associated Press Stylebook.