Homebuying activity was essentially unchanged in January 2019 compared to one year ago, according to NAR’s January 2019 REALTORS® Confidence Index Survey. The REALTORS® Buyer Traffic Index registered 52 in January 2019, just slightly above 50, a level that indicates no change in the overall direction of buyer traffic activity, One year ago, the REALTORS® Buyer Traffic Index was at 69, a level that indicates homebuying traffic was broadly stronger compared to conditions one year ago. A lower index in one month compared to the level in another month slower activity during that former month, so the steep decline in the value of the index from 69 to 52 indicates homebuying conditions have slowed significantly from conditions one year ago. The REALTORS® Buyer Traffic Index has fallen below leads existing home sales by one to two months, so the January reading is an indicator of sales in the next one to two months.
Buyer traffic was broadly weaker during November and December 2018 and January 2019 compared to conditions one year ago in the District of Columbia and in states 16 states that included Oregon, California, Nebraska, Iowa, Illinois, Maryland, Connecticut, Rhode Island, and New Hampshire. However, buyer traffic conditions were broadly stronger during November and December 2018 and January 2019 compared to conditions one year ago in Idaho, Utah, Wisconsin, Indiana, Alabama, Georgia, South Carolina and North Carolina.
The REALTORS® Buyer Traffic Index has hovered at near 50 since August 2018 when the index fell to 51 and remained at below 50 through December 2018. The January reading of 52 indicates a slight upturn in homebuyer traffic as mortgage rates started falling in January 2019. As of the week of February 14, the average 30-year fixed mortgage rate fell to 4.37 percent, from a high of 4.94 in the weeks of November 8 and 15.
Higher mortgage rates compared to one year ago, the negative effect on confidence of the government shutdown, the cap on deductions for property, state, and local income taxes, and the very cold weather were some factors cited by the respondents for the slowdown in buyer activity in their markets.
Respondents from some Midwest states— Ohio, Illinois, Iowa, Michigan, Missouri, Indiana— reported that the extremely cold weather held homebuying activity.
Some respondents from California, New York, and New Jersey reported the cap on deductions for property, state and local income taxes is negatively affecting sales.
A respondent from California also noted that the widespread wildfires in 2018 are still impacting home sales.
Respondents from Alabama, California, Nevada, Florida, Texas, and Virginia reported that the government shutdown appeared to have had an impact in homebuying activity.
Lack of supply, especially of affordable homes, continues to frustrate would-be homebuyers.
REALTORS® reported that higher mortgage rates (during October, November and December) discouraged buyers
To note, mortgage rates have started falling again since January 2019. As of February 14, the 30-year fixed rate mortgage has fallen to 4.37 percent from 4.8 percent during the weeks of November 8 and 15. The 30-year fixed mortgage rate is still slightly higher compared to the 3.95 percent in January 2018. The monthly increase in mortgage payment arising from a 0.5 percent increase in mortgage rates on a loan of $250,000 is about $73 per month.
In a monthly survey of REALTORS®, NAR asks respondents “Compared to the same month (January) last year, how would you rate the past month’s traffic in neighborhood(s) or area(s) where you make most of your sales?” NAR compiles the responses into an index, where an index above 50 indicates that more respondents reported “stronger” traffic than “weaker” traffic. In generating the buyer traffic index at the state level, NAR uses data for the last three surveys to have close to 30 observations. Small states such as AK, ND, SD, MT, VT, WY, WV, DE, and D.C., may have fewer than 30 observations. The index is not seasonally adjusted, so a year-over-year comparison is appropriate.
 The index is not seasonally adjusted, so a year-over-year comparison is appropriate compared to a month-to-month comparison in evaluating whether market conditions are improving or deteriorating.
 Freddie Mac’s survey of 30-year fixed rate mortgages
Bloomberg reported that 876,000 acres were burned in California due to wildfires, citing data form the California Department of Forestry and Fire and Protection in Now California Wildfires Burn All Year; see https://www.bloomberg.com/news/articles/2019-01-17/california-fires-burn-all-year-as-drought-left-state-a-tinderbox
 Rates started falling after Chairman Powell of the Federal Reserve Board announced in December 2018 that it was looking at one rate hike in 2019.
In a monthly survey of REALTORS®, respondents reported that properties were typically on the market for 42 days (36 days in October 2018; 40 days in November 2017), according to the November 2018 REALTORS® Confidence Index Survey. Properties are staying longer on the market due to slower demand with mortgage rates rising and with new home construction steadily, though modestly, rising.
During September–November 2018, properties typically stayed on the market for 31 to 45 days in California, Oregon, Arizona and Texas, a slower pace compared to less than one month in previous months (Map 1). However, properties continue to sell in less than 31 days in the District of Columbia (28 days) and in 16 states such as Washington (28 days), Nevada (28 days), Utah (23 days), Colorado (26 days), and Massachusetts (27 days).
Properties typically stayed longer on the market in September-November 2018 compared to the same period in 2017 (blue areas) in the District of Columbia and in 22 states such as California, Washington, Oregon, Nevada, Colorado, Massachusetts, and Texas (Map 2).
Properties are staying longer on the market due to the combination of lower demand and the steady increase in new home construction. In states such as California, Oregon, Colorado, Texas, Virginia, North Carolina, and South Carolina, the number of building permits increased during November 2017-October 2018 compared to the prior 12-month period (Map 3).  In generating the median days on market at the state level, NAR uses data for the last three surveys to have close to 30 observations. Small states such as AK, ND, SD, MT, VT, WY, WV, DE, and D.C., may have fewer than 30 observations.
Home price appreciation is an important topic in today’s economy. Using data from the American Community Survey (ACS), we can analyze the gains and losses of property values over time. I estimated the median property values by state in 2018 using the FHFA index and the median property values from the (ACS). I then calculated the growth rate from 2005 -2018. 
The states with the highest estimated median property values in 2018 are The District of Columbia ($677,473), Hawaii ($649,272), California ($566,311), Massachusetts ($428,161) and Washington ($384,740).
The states with the lowest estimated median property values in 2018 are Alabama ($148,827), Oklahoma ($139,385), Arkansas ($135,733), Mississippi ($123,586) and West Virginia ($120,720).
On a regional level, the estimated price growth appears to be the strongest in the South, West, and Midwest. Price growth is weakest in the Northeast states. Overall, all regions are displaying strong to moderate growth in property values. Below is a breakdown of the Census four regions by state.
In the South, which typically leads all regions in sales, The District of Columbia led the region with 76 percent estimated price growth from 2005 to 2018. Maryland experienced 1 percent annual price growth and since 2005, home prices have grown 21 percent.
In the West, the least affordable region, Montana led all states with 88 percent price growth from 2005 to 2018. Despite the strong price growth in California since 2012, prices have only increased by 19 percent since 2005. Nevada shows a 9 percent price change over this time turning around any previous loss in value.
In the Midwest where affordability is most favorable, North Dakota led all states with 115 percent price growth from 2005 to 2018. Illinois, while having the smallest growth in the region had an estimated 12 percent price growth over this time.
In the Northeast where sales and price growth is typically slow, Pennsylvania lead the region with a 48 percent price growth from 2005 to 2018. Rhode Island, while having the smallest gain of all states, increased 6 percent price change over this time. Rhode Island is one of two states that turned around a negative property value over this time compared to 2017.
 I used the FHFA expanded data set not seasonally adjusted data.
In the monthly REALTORS® Confidence Index Survey, the National Association of REALTORS® asks members “In the neighborhood or area where you make most of your sales, what are your expectations for residential property prices over the next year?”
Among the REALTOR® respondents who responded to the January 2018 survey, the median expected price change for the next 12 months was 3.6 percent, according to the January 2018 REALTORS® Confidence Index Survey. In December 2017, the median expected price change was 3.1 percent. Strong buyer traffic amid low supply of homes coming into the market continues to push up home prices. In January 2018, the median price of existing homes sold rose to $240,500, up six percent from one year ago.
The map below shows the median expected price change of the respondents in the next 12 months at the state level based on surveys conducted during November 2017—January 2018. The highest median expected price growth of more than five to seven percent was in Washington, Nevada, and Wyoming.
In Oregon, Idaho, Utah, Arizona, Colorado, and Florida, the median expected price growth was four to five percent. REALTORS® reported stronger buyer traffic in these states compared to one year ago, based on the RCI Buyer Traffic Index, while the number of homes for sale has remained essentially unchanged, based on the RCI Seller Traffic Index.
In states with high property tax rates or property prices, such as New York, New Jersey, Connecticut, and California—states which are the most affected by the Tax Cuts and Jobs Act that put a cap on total itemized deductions property and state and local taxes — the median expected price change among respondents was two to three percent.
Lack of supply amid strong buyer interest continues to push prices up. At the metro area level, data on the number of active listings on Realtor.com indicates how serious the lack of supply is. Of the 500 metro areas tracked by Realtor.com, active listings are lower compared to one year ago in 395 out of 500 metro/micro areas, 80 percent. Areas in red show active listings are lower compared to one year ago, while areas in blue have more active listings.
 To increase the number of observations for each state, NAR uses data from the last three surveys.
 To note, the median expected price change is based on data collected from October—December 2017, while the Trump administration released its proposed tax measures only in November 2017, and the Tax Cuts and Jobs Act was signed by President Trump on December 22, 2017, so October survey responses may not factor in the effect of tax reform measures on price expectations.
In a monthly survey of REALTORS®, respondents are asked “Compared to the same month last year, how would you rate the past month’s traffic in neighborhood(s) or area(s) where you make most of your sales?” Respondents rate buyer traffic as “Stronger” (100), “Stable” (50), or “Weaker” (0) and the responses are compiled into a diffusion index. An index greater than 50 means that more respondents reported “stronger” than “weaker” conditions.
The chart below shows buyer traffic conditions in October–December 2017 compared to conditions one year ago, according to the December 2017 REALTORS® Confidence Index Survey. Except for four states,REALTORS® reported that buyer conditions were “stable” (unchanged) to “very strong” compared to conditions one year ago. Respondents from Texas and Florida, states which were hit by hurricanes Harvey and Irma, generally reported “strong” buying activity compared to one year ago. On the other hand, Alaska, North Dakota, Louisiana, and West Virginia respondents generally reported “weak” buyer traffic compared to one year ago, and this may be related to the effect of the slump in oil prices since 2015, though oil prices have started to firm up again in 2017 as OPEC cut its oil production.
Supply conditions in October –December 2017 is improving but supply is still tight, with only 26 states having seller traffic conditions that are “stable” (unchanged) or “strong” compared to conditions one year ago. Most of the states with stable or improving seller activity in October-December 2017 are in southern area of the United States.
Nationally, the REALTORS® Buyer Traffic Index registered at 66, while the REALTORS® Seller Traffic Index was at 47. An index above 50 indicates that more respondents reported stronger than weaker conditions compared to one year ago, so the data indicates that homebuying demand continues to outpace supply.
The REALTORS® Buyer Traffic Index as Leading Indicator of Contracts and Sales
The REALTORS® Buyer Traffic Index is a leading indicator of future contracts (pending home sales sales) and closings (existing home sales). The REALTORS® Buyer Traffic Index tends to lead pending home sales by one month and existing home sales by two months. The uptick in the November and December 2017 Buyer Traffic Index indicates a continued uptick in sales on a month-to-month basis in January and February 2018.
 In generating the indices, NAR uses data for the last three surveys to have close to 30 observations. Small states such as AK, ND, SD, MT, VT, WY, WV, DE, and D.C., may have fewer than 30 observations.For graphical purposes, index values from25.01 to 45 are labeled “Weak,” values of 45.01 to 55 are labeled “Stable,” values of 55.01 to 75 are labeled “Strong,” and values greater than 75 are labeled “Very Strong.”