Home buyer foot traffic can be a strong indicator of the demand for housing, and foot traffic has been strong this spring, according to data from the National Association of REALTORS®, which measures foot traffic by the number of times SentriLock lock boxes are opened.
"Despite a steady upward movement in mortgage rates in the spring, demand for housing remains strong," NAR notes on its Economists' Outlook blog. NAR's index for foot traffic was 13.8 points higher than the same time last year. A measure above 50 indicates that more than half of about 200 markets analyzed had stronger traffic in May than the same month a year prior.
Of the 14 cities that NAR tracks on a local level, the strongest improvements in foot traffic compared to last year were in San Diego, Iowa City, and El Paso, Texas.
"Foot traffic continues to signal a positive summer trend for home sales," NAR notes on its blog. "Improvements to economic fundamentals like employment, access, and pricing support for current shoppers, but rising rates will create a headwind later this year. Over the long-term, wage growth and expanded supply can help to ameliorate these factors."
A few markets saw foot traffic contract compared to last year, such as Salem, Mass.; Boulder, Colo.; Kingston, N.Y.; and Honolulu. But NAR says that it isn't necessarily alarming.
"While foot traffic is falling in some markets, that is not necessarily an indication of a decline in demand," NAR notes. "After nearly three years of low supply, traffic may fall in certain markets due to lack of opportunities for an open house."
source: National Association of REALTORS® Economists' Outlook Blog