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July 2017

REALTORS CONFIDENCE INDEX SURVEY

Research Division
NATIONAL ASSOCIATION of REALTORS

July 2017 REALTORS CONFIDENCE INDEX SURVEY


July 2017 Market Conditions and Outlook

Amid sustained job creation and still historically low mortgage rates,
REALTORS reported strong homebuying demand in July 2017.
Properties continued to sell at a brisk pace, and homebuyers faced
higher prices as supply remained low relative to demand.
Demand from first-time buyers continued to increase at a modest pace.
More REALTORS expect strong than weak market conditions in
the next six months compared to current market conditions.
Amid tight supply, most respondents expect constant or increasing
prices in the next 12 months.
REALTORS reported tight inventory and rising interest rates as the
key issues affecting current conditions and the 12-month outlook.

July 2017 REALTORS CONFIDENCE INDEX SURVEY


July 2017 Highlights
July 2017 REALTORS Confidence Index Survey Highlights

July-17 June-17 July-16

RCI Buyer Traffic Index* 69 71 64

RCI Seller Traffic Index* 49 47 45

RCI Current Conditions: Single-Family Sales* 75 75 71

RCI Six-Month Outlook: Single-Family Sales* 71 72 69

First-Time Home Buyers, as Percent of Sales 33 32 32

Cash Sales, as Percent of Sales 19 18 21

Distressed Sales, as Percent of Sales 5 4 5

Sales for Non-Primary Residence Use, as Percent of Sales** 13 13 11


Median Days on Market 30 28 36

Sold at Original List Price or Premium, as Percent of Sales 36 40 36

Median Expected Price Growth in Next 12 Months (%) 2.7 3.4 2.8
*This is a diffusion index. An index greater than 50 indicates strong conditions and an index less than 50 indicates weak conditions.
**Non-primary residence use refers to the primary use of the property for either vacation or residential rental.

July 2017 REALTORS CONFIDENCE INDEX SURVEY


I. Market Conditions and Expectations

July 2017 REALTORS CONFIDENCE INDEX SURVEY


Market Conditions Remained Strong

The REALTORS Confidence REALTORS Confidence IndexCurrent Conditions


IndexCurrent Conditions
indices for detached
single-family, townhome,
90
and condominium 80
75
properties were above 50, 70
indicating more 60 59

respondents reported 50 52
40
strong than weak
30
market conditions in July 20
2017 compared to the 10
same month last year. 0
200801
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Single-family Townhome Condominium

July 2017 REALTORS CONFIDENCE INDEX SURVEY


Buyer Traffic Strong, Seller Traffic Weak

Demand continued to REALTORS Buyer and Seller Traffic Indices


outpace supply in July
2017. Buyer traffic
remained strong while 80
seller traffic remained 70 69
weak.
60
The REALTORS Buyer
Traffic Index registered 50
49
at 69 (71 in June 2017; 40
64 in July 2016).
30
The REALTORS Seller
Traffic Index remained 20
200801
200805
200809
200901
200905
200909
201001
201005
201009
201101
201105
201109
201201
201205
201209
201301
201305
201309
201401
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201501
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201601
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201609
201701
201705
below 50 (47 in June
2017; 45 in July 2016).
An index below 50
reflects tight supply of
homes for sale. Buyer Traffic Index Seller Traffic Index

July 2017 REALTORS CONFIDENCE INDEX SURVEY


Homebuying Demand Stood Strong

Compared to
conditions in the
same month last year,
buyer traffic
conditions were
stable (no change in
conditions) to very
strong, except in
Delaware where
conditions were
weak.

*For graphical purposes, index values less than or equal to 25 are labeled Very Weak, values of 25.01 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.

July 2017 REALTORS CONFIDENCE INDEX SURVEY


Inventory Remained Tight

Compared to
conditions in the same
month last year, seller
conditions were
strong only in nine
states and the District
of Columbia.

*For graphical purposes, index values less than or equal to 25 are labeled Very Weak, values of
25.01 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.

July 2017 REALTORS CONFIDENCE INDEX SURVEY


Days on Market Continued To Trend Down

Median Days on Market of Sales Reported by


Amid tight supply, REALTOR Respondents
properties were typically
on the market for 30 120

days (28 days in June


100
2017; 36 days in July
2016). 80

Fifty-one percent of 60
properties were on the
market for less than one 40

month when sold, 30


20
compared to 47 percent
in the same month one 0
year ago.
201105
201108
201111
201202
201205
201208
201211
201302
201305
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201311
201402
201405
201408
201411
201502
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201511
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201608
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201705
July 2017 REALTORS CONFIDENCE INDEX SURVEY
Properties Sold Quickly in Many States

Properties that sold in


MayJuly 2017 were
typically on the
market for less than
31 days in 29 states
and the District of
Columbia.

July 2017 REALTORS CONFIDENCE INDEX SURVEY


Home Prices Continued to Increase

Percentage Distribution of Price Change from a Year Ago


Amid tight supply, Reported by REALTOR Respondents
home prices
continued to increase
90%
in many areas. 80%

Ninety-one percent of 70% 71%


60%
respondents reported
50%
that home prices 40%
either remained 30%
constant or rose in 20% 20%

June 2017 compared 10% 9%


0%
to one year ago
201203
201205
201207
201209
201211
201301
201303
201305
201307
201309
201311
201401
201403
201405
201407
201409
201411
201501
201503
201505
201507
201509
201511
201601
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201611
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(89 percent in June
2017, 88 percent in
June 2016).
Higher Lower Unchanged

July 2017 REALTORS CONFIDENCE INDEX SURVEY


Properties Sold Above Listing Price

Percent of Properties Sold at Original Price or at Net


Because conditions are Premium from the Listing Price
competitive for buyers 45%

and supply is tight, offers


continued to be high
40%
relative to asking price.
Thirty-six percent of
36%
properties sold at or 35%

above the original listing


price (40 percent in June 30%
2017; 36 percent in July
2016).
25%

20%
201212
201302
201304
201306
201308
201310
201312
201402
201404
201406
201408
201410
201412
201502
201504
201506
201508
201510
201512
201602
201604
201606
201608
201610
201612
201702
201704
201706
July 2017 REALTORS CONFIDENCE INDEX SURVEY
More Clients Took Home Tours

Average Number of Clients Taken on a Home Tour by Agent


On average, REALTOR 7.0
respondents took
nearly six clients on a 6.0 5.7
home tour in July 2017
5.1
compared to just over 5.0 4.6 4.7 4.7 4.7 4.8
5.0
4.8
5.0

four clients one year 4.2


4.4 4.4 4.4 4.4 4.3 4.3 4.3
4.1
ago. 4.0

The increase in home


tours from a year ago is 3.0

another indicator of
2.0
strong buyer interest in
the housing market.
1.0

0.0
201601

201602

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201610

201611

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201701

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July 2017 REALTORS CONFIDENCE INDEX SURVEY
Offers Per Client Held Steady

Average Number of Offers Written Per Client Taken on a


On average, REALTOR Home Tour*
respondents wrote
nearly two offers per
3.0
client they took on a
home tour, about the 2.5
2.2
same as the number of 2.0
offers written one year
ago. 1.5

1.0

0.5

0.0
201510
201511
201512
201601
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*Regardless of acceptance

July 2017 REALTORS CONFIDENCE INDEX SURVEY


Strong Markets Expected in Six Months
The REALTORS Confidence
IndexSixMonth Outlook REALTORS Confidence IndexSix-Month Outlook
Current Conditions indices
for detached single-family,
townhome, and 90

condominium properties 80
71
70
were above 50, indicating 60 57
more respondents 50
51
expected conditions to 40
strengthen rather than 30

weaken over the next six 20


10
months.
0
200801
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200809
200901
200905
200909
201001
201005
201009
201101
201105
201109
201201
201205
201209
201301
201305
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201401
201405
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201501
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201601
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Single-family Townhome Condominium

July 2017 REALTORS CONFIDENCE INDEX SURVEY


Home Prices Expected to Increase
REALTOR respondents
expected strong price
growth in Washington,
Nevada, Utah, and
Colorado, of more than
five percent in the next
12 months.
Respondents expected
prices to remain stable
or increase modestly in
states that are more
reliant on oil production
(e.g. Alaska, North
Dakota, Wyoming,
Oklahoma, Mississippi,
and West Virginia) and in
Connecticut and
Vermont.

July 2017 REALTORS CONFIDENCE INDEX SURVEY


II. Characteristics of Buyers and Sellers*

* Based on the respondents most recent sale for the month.

July 2017 REALTORS CONFIDENCE INDEX SURVEY


Share of First-time Homebuyers Remains
Modest
Of all buyers, First-time Buyers as Percent of Residential Market
33 percent were
first-time buyers
(32 percent in June 60%

2017; 32 percent in 50%


July 2016).
40%
Sustained job growth, 33%
improving incomes, 30%
and the aging of the
Millennial generation 20%

are likely underpinning 10%


the sustained, albeit
modest, demand by 0%
200810
200901
200904
200907
200910
201001
201004
201007
201010
201101
201104
201107
201110
201201
201204
201207
201210
201301
201304
201307
201310
201401
201404
201407
201410
201501
201504
201507
201510
201601
201604
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201610
201701
201704
201707
first-time buyers.

NARs 2016 Profile of Home Buyer and Sellers (HBS) reports that among primary residence home buyers, 35 percent were first-time home buyers, up
from 32 percent in 2015. The HBS surveys primary residence home buyers, while the monthly RCI Survey surveys REALTORS and captures purchases
for investment purposes and vacation/second homes. The U.S. Census Bureau defines the Millennial generation as those born in 19822000.

July 2017 REALTORS CONFIDENCE INDEX SURVEY


Increased Sales: Buyers 34 Years and
Younger
Age Distribution of Buyers for Sales Reported by
Home sales among REALTOR Respondents
buyers 34 years and
100%
younger have been on 90% 18%
an uptrend. This age 80%
group accounted for 70%
60% 46%
36 percent of sales, up 50%
from 26 percent in July 40%

2013 when the RCI 30%


20% 36%
Survey first asked the 10%
question.* 0%
201307
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Age 34 and under Age 35 to 55 Age 56 and over

*NARs 2016 Profile of Home Buyer and Sellers (HBS) reports that among primary residence home buyers, 28 percent were 18-34 years old.
The HBS surveys primary residence home buyers, while the monthly RCI Survey surveys REALTORS and captures purchases for investment
purposes and vacation/second homes.

July 2017 REALTORS CONFIDENCE INDEX SURVEY


Renters: Still on the Sidelines

Homebuyers who Living Status of Homebuyers at Time of Home Purchase


were renting prior to
100%
their home purchase 90%
6%
13%
accounted for 80%

40 percent of sales 70%


60% 41%
(43 percent in June 50%
2017; 46 percent in July 40%
30%
2016). * The data since 20% 40%
2015 indicates that 10%
renters have not made 0%
201510
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a significant transition
to becoming
homeowners.
Rented an apartment or house Lived in a property that they owned
Lived with parents, relatives, or friends Other

NARs 2016 Profile of Home Buyer and Sellers (HBS) reports that among primary residence home buyers, 41 percent rented an apartment or house prior to
their home purchase. The HBS surveys primary residence home buyers, while the monthly RCI Survey surveys REALTORS and captures purchases for investment
purposes and vacation/second homes.

July 2017 REALTORS CONFIDENCE INDEX SURVEY


Home Inspection Topped Buyer
Contingency List
Contract Settlement Contingencies as a Percent of
Ninety-three percent Respondents*
of agents who worked
with buyers reported 18% 17%
contract contingencies 16%
13%
14% 12%
for their most recent 12%
10%
sale in July 2017. 8%
5%
6% 4%
Passing a home 4% 2% 2% 2%
2%
inspection, getting an 0%
acceptable appraisal
valuation, and obtaining
financing were the
most common buyer
contingencies reported
in July 2017.
*Respondents refer to buyers' agents. Multiple responses are allowed.

July 2017 REALTORS CONFIDENCE INDEX SURVEY


Distressed Property Sales Have Declined

Distressed Sales as Percent of Residential Sales


Distressed sales
accounted for five
percent of sales in July 60%

2017 (four percent in 50%


June 2017; five percent
40%
in July 2016).
30%
With rising home values,
improved economic 20%
conditions, and fewer
10%
homes going into 1%

foreclosure, the share of 0% 4%


200810
200902
200906
200910
201002
201006
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201206
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sales of distressed
properties has generally
declined.

Foreclosed Short sale

July 2017 REALTORS CONFIDENCE INDEX SURVEY


Cash Sales Have Declined

Nineteen percent of Cash Sales as Percent of Residential Sales


sales were all-cash
(18 percent in June
40%
2017; 21 percent in
35%
July 2016).
30%
As sales to investors
and distressed 25%

properties have fallen, 20%


19%

the share of cash sales 15%


has declined compared
10%
to 2009-2014 levels.
5%

0%
200810
200902
200906
200910
201002
201006
201010
201102
201106
201110
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201206
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July 2017 REALTORS CONFIDENCE INDEX SURVEY
Sellers Received Two Offers on Average

Average Number of Offers Received on the Most Recent


Sellers who closed a Closed Sale
sale in July 2017 2.8

received two offers


2.6
on average, about the
same as one year ago. 2.4 2.3

The number of offers 2.2

tends to increase 2.0


during the spring.
1.8

1.6

1.4

1.2

1.0
201510

201511

201512

201601

201602

201603

201604

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201606

201607

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201610

201611

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201701

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201704

201705

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July 2017 REALTORS CONFIDENCE INDEX SURVEY
Sellers Offered Few Incentives

Seller Incentives Offered


Nineteen percent of
sellers reported
90%
offering incentives. 81%
80%
Helping cover the
70%
closing cost, providing
60%
warranties,
undertaking 50%

remodeling, and 40%

providing appliances 30%


were the incentives 20%
offered by sellers on 10%
10%
8%
sales that closed in July 2% 1% 2%
0%
2017. No incentive Closing Cost Warranty Remodelling Appliances Other

July 2017 REALTORS CONFIDENCE INDEX SURVEY


Most Sellers Used the Property as Primary
Residence
Seller's Use of Property
Most sellers used the
property as a primary 100% 1%
6%
0% 1% 1% 2% 1% 1% 1% 1% 1% 1% 1%
6%
7% 7% 7% 8% 9% 8% 7% 7% 5% 7%
residence. 90%
16%
19% 18% 19% 18% 20% 16%
80% 21% 22% 23% 23% 23%
Sixteen percent of 70% 6% 6% 6% 6% 5%
6% 5%

sellers who sold a 60%


5% 6% 6% 6% 6%

property in July 2017 50%


used the property for 40%
73%
69% 68% 67% 69% 68% 70%
investment purpose, as 30% 64% 62% 62% 63% 63%

a rental property. 20%


10%
0%
201608

201609

201610

201611

201612

201701

201702

201703

201704

201705

201706

201707
Primary Vacation Investment Property (Rental) Other* Dont Know*

July 2017 REALTORS CONFIDENCE INDEX SURVEY


Most Sellers Vacated Property After
Contract Was Accepted
When Seller Vacated Property
Most sellers vacated the
property between 100%
6% 6% 5% 5%
2%
contract acceptance and 90% 3% 3%
5% 6%
3%
1% Don't Know
8% 7%
closing. 80% 7%
7% 11% 6%
More than 6 Months Before Listing
8%
Eighteen percent of 70% 8% 6%
3-6 Months Before Listing
sellers vacated the 60%

property after closing 50%


2 to 3 Months Before Listing
58%
under leaseback terms. 40%
49% 50% 48%
Within 1 Month Before Listing

30%
Between Listing and Contract
Acceptance
20%
Between Contract Acceptance and
10% 18% 20% 21% 18% Closing
After Closing (Leaseback)
0%
201704 201705 201706 201707

July 2017 REALTORS CONFIDENCE INDEX SURVEY


III. Issues Affecting Buyers and Sellers

* Based on the respondents most recent sale for the month.

July 2017 REALTORS CONFIDENCE INDEX SURVEY


Rising Mortgage Rates: Modest Impact on
Homeowner Decisions
Since December
2016, a modest Percent of Respondents Who Reported They Had a Client Who
fraction of Decided Not to Move/Sell to Keep Current Mortgage Rate
respondents have
16%
reported they had
a client who 14% 14%
14%
decided not to sell 14%
13%
13%

or move to keep 12% 12%


the existing 12%

mortgage rate. 10%


10%
The 30-year fixed
mortgage rate
increased to above 8%

four percent in the


week of November 6%

24, 2016.* Rates


have dropped to 4%
below four percent
in recent weeks, to 2%
3.93 percent in the
week of July 27, 0%
2017. Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17

*Source: Freddie Mac, downloaded from Haver Analytics. Average mortgage rates peaked at 4.3 percent in the week of March 16, 2017.

July 2017 REALTORS CONFIDENCE INDEX SURVEY


terminated.
percent were
In MayJuly 2017,

of contracts were
settled on time, 25

settlement, and two


seventy-two percent

percent had a delayed

10%
20%
30%
40%
50%
60%
70%
80%
90%

0%
100%

201501-201503
201502-201504
201503-201505
201504-201506
201505-201507

July 2017 REALTORS CONFIDENCE INDEX SURVEY


201506-201508
201507-201509
201508-201510
201509-201511
201510-201512
201511-201601
201512-201602
201601-201603
Contract was terminated

201602-201604
Contract was settled on time

201603-201605
201604-201606
201605-201607
201606-201608
Contract Settlement

201607-201609
Most Contracts Settled on Time

201608-201610
201609-201611
201610-201612
Contract was delayed but eventually went into settlement

201611-201701
201612-201702
201701-201703
201702-201704
201703-201705
201704-201706
2%

201705-201707
72%
25%
Financing and Appraisals Topped List of
Delays
Problems Encountered for Contracts That Were Delayed in
Issues related to MayJuly 2017*
obtaining financing and 40% 37%
35%
appraisal were the most 30%
23%
common causes of 25%
20% 17%
contract settlement 15% 13%
10% 8%
delays in MayJuly 2017. 10% 5% 5%
2%
5%
0%

*Delayed contracts accounted for 25 percent of closed or terminated contracts during this period.

July 2017 REALTORS CONFIDENCE INDEX SURVEY


REALTOR Concerns

REALTOR respondents
reported conditions of low
inventory, shortage, and
rising interest rate as
major issues in July 2017.

July 2017 REALTORS CONFIDENCE INDEX SURVEY


About the RCI Survey

The RCI Survey gathers information from REALTORS about local market conditions
based on their client interactions and the characteristics of their most recent sales
for the month.
The July 2017 survey was sent to 75,000 REALTORS who were selected from
NARs nearly 1.2 million members through simple random sampling and to 7,903
respondents in the previous three surveys who provided their email addresses.
There were 2,751 respondents to the online survey which ran from August 18,
2017. The surveys overall margin of error at the 95 percent confidence level is 1.9
percent.* The margins of error for subgroups and sample proportions of below or
above 50 percent are larger.
NAR weights the responses by a factor that aligns the sample distribution of
responses to the distribution of NAR membership.

*Based on 2,751 respondents out of 1.2 million NAR members and a 50 percent proportion estimate.

July 2017 REALTORS CONFIDENCE INDEX SURVEY


Research Division
National Association of REALTORS
RCI Lead Team
Lawrence Yun, Senior Vice President and Chief Economist
George Ratiu, Managing Director, Housing and Commercial Research
Gay Cororaton, Research Economist
Meredith Dunn, Research Communications Manager
The RCI Lead Team acknowledges Jessica Lautz, Managing Director, Survey
Research and Communications, Amanda Riggs, Research Survey Analyst, and
Brandi Snowden, Research Survey Analyst, for their inputs in improving the
survey and in editing and disseminating the report. Karen Belita, Data
Scientist, created the visualization of REALTOR comments.
Acknowledgement goes to Lisa Herceg, Director, Marketing Research, who
sends out the survey to members.
The REALTOR Confidence Index is provided by NAR solely for use as a
reference. Resale of any part of this data is prohibited without NAR's prior
written consent. For questions on this report or to purchase the RCI series,
please email: Data@realtors.org.

July 2017 REALTORS CONFIDENCE INDEX SURVEY


Research Division
National Association of REALTORS

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July 2017 REALTORS CONFIDENCE INDEX SURVEY


The National Association of REALTORS, The Voice for Real Estate, is Americas largest trade association,
representing 1.2 million members, including NARs institutes, societies and councils, involved in all aspects of the real
estate industry. NAR membership includes brokers, salespeople, property managers, appraisers, counselors and others
engaged in both residential and commercial real estate.
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.
Working for Americas property owners, the National Association provides a facility for professional development,
research and exchange of information among its members and to the public and government for the purpose of preserving
the free enterprise system and the right to own real property.

NATIONAL ASSOCIATION OF REALTORS


RESEARCH DIVISION
The Mission of the National Association of REALTORS Research Division is to collect and disseminate timely, accurate
and comprehensive real estate data and to conduct economic analysis in order to inform and engage members,
consumers, and policymakers and the media in a professional and accessible manner.

NATIONAL ASSOCIATION OF REALTORS


Research Division
500 New Jersey Avenue, NW
Washington, DC 20001
202-383-1000
data@realtors.org

2017 National Association of REALTORS


All Rights Reserved.
May not be reprinted in whole or in part without permission of the National Association of REALTORS.
For reprint information, contact data@realtors.org.

July 2017 REALTORS CONFIDENCE INDEX SURVEY


July 2017
REALTORS CONFIDENCE INDEX SURVEY

Research Division
NATIONAL ASSOCIATION of REALTORS

July 2017 REALTORS CONFIDENCE INDEX SURVEY