REALTORS®remain broadly optimistic about housing market conditions over the next six months, according to the December 2016 REALTORS® Confidence Index Survey Report, a monthly survey of REALTORS® about their sales activity and local market conditions. The REALTORS® Confidence Index—Six-Month Outlook indices for all properties have been trending upward since 2012, and on an annual basis, 2016 was a record year for each property type, with each registering above 50. The REALTORS® Confidence Index—Six-Month Outlook for single-family homes has registered above 50 since 2012. An index above 50 indicates that more REALTOR® respondents expect market conditions to be “strong” than “weak” over the next six months compared to current conditions.
The index for condominiums was at 56 in December 2016 (54 in November 2016; 51 in December 2015), the highest level since this index was generated in 2008. The approval of H.R. 3700, the “Housing Opportunity Through Modernization Act of 2016,” appears to be bolstering homebuying in the condominium market. Among other measures, the law eases access to FHA condominium financing by reducing the FHA condominium owner-occupancy ratio from 50 percent to 35 percent, directing the FHA to streamline the condominium re-certification process, and providing more flexibility for mixed-use buildings.
In the single-family homes market, the outlook in the next six months is “strong” in many states to “very strong” in the District of Columbia and in 14 states. Only North Dakota registered with a “moderate” outlook in the most recent period. In the townhomes and condominiums markets, the outlook is more evenly mixed, from “weak” to “strong” in most states, with only the District of Columbia registering a “very strong” outlook for both townhomes and condominiums. Post-election factors may boost the outlook in the District of Columbia.
 The author acknowledges Danielle Hale, Managing Director, Housing Research; Meredith Dunn, Research Communications Manager; and Amanda Riggs, Research Survey Analyst for their comments. Any errors are attributable to the author.
 Respondents are asked, “What are your expectations for the housing market over the next six months compared to the current state of the market in the neighborhood(s) or area(s) where you make most of your sales?” The responses for each type of property are compiled into an index. An index of 50 indicates a balance of respondents having “weak” (index=0) and “strong” (index=100) expectations or all respondents having moderate (=50) expectations. The index is not adjusted for seasonality.
The bill, which was championed by NAR, passed the House of Representatives 427-0 and the Senate under unanimous consent on July 14, 2016 and was signed by President Obama on July 29, 2016. See http://www.realtor.org/articles/president-obama-signs-hr-3700
 To increase the number of observations for each state, the index is based on data for the last three months. Small states such as AK, ND, SD, MT, VT, WY, WV, DE, and D.C., may have fewer than 30 observations. Respondents rated conditions or expectations as “Strong (100),” “Moderate (50),” and “Weak (0).” The responses are compiled into a diffusion index. A diffusion index greater than 50 means that more respondents rated conditions as “Strong” than “Weak.” For graphical purposes, index values 25 and lower are labeled “Very Weak,” values greater than 25 to 45 are labeled “Weak,” values greater than 45 to 55 are labeled “Moderate,” values greater than 55 to 75 are labeled “Strong,” and values greater than 75 are labeled “Very Strong.” The range of +/-5 around 50 approximates the historical margins of error at the 95 percent confidence level for small states.
 See for example this review: http://economistsoutlook.blogs.realtor.org/2016/10/05/do-elections-affect-the-housing-market-in-washington-dc/
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