Buyers failed to bite this summer despite falling mortgage rates. It has agents about as down on their business prospects as they’ve been all year heading into the NAR settlement era, according to Intel’s Client Pipeline Tracker.
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As mortgage rates continue to drop, real estate agents are increasingly able to picture a future in which more seller clients are lured back into the market.
There just may not be many buyers waiting to meet them.
Agent sentiment toward their future revenue pools reached a 10-month low in late August, according to Intel’s Client Pipeline Tracker metric.
These worsening attitudes were mostly driven by a reported thinning of buyer pipelines over the last 12 months — and a growing sense that first-time buyers will remain tough to recruit in the year ahead.
Client Pipeline Tracker score in August: -10
Previous score: -7 in July
Recent peak: +7 in January
Chart by Daniel Houston
The Client Pipeline Tracker is an updating measure of agent sentiment toward the pool of potential real estate buyers and sellers. The metric is powered by the Inman Intel Index monthly survey of real estate professionals.
This souring of expectation over the past month coincides with the immediate aftermath of the Aug. 17 deadline for changes stemming from the NAR settlement.
However, an Intel review of its own surveys and purchase-loan data suggests that market forces are also weighing heavily on the brokerage business.
Read the full breakdown of the latest Client Pipeline Tracker results in the report below.
Buyers beware
Intel’s Client Pipeline Tracker is a compilation of how agents feel about their buyer and seller pipelines — both over the past year and in the near future.
Intel described the full methodology in this post, but here’s a quick refresher on how to interpret the scores.
A score of 0 represents a neutral period in which client pipelines are neither improving nor worsening.
A positive score reflects a market in which client pipelines have been improving, or are widely expected to improve in the next 12 months. The higher the rating, the more confident agents are in that conditions are moving in a positive direction.
A negative score suggests client pipeline conditions are worsening, or are widely expected to get worse in the year to come.
An extremely positive combined score falls somewhere around +20. This type of score would signify that much of the industry is in agreement with the fact that pipelines are improving and will continue to improve.
An extremely negative combined score, on the other hand, falls closer to -20. That’s a bit lower than where the industry stood in September, the first time Intel surveyed agents about their pipelines.
For the four individual components that go into the score, results as high as +50 or as low -50 are sometimes observed.
Here are the component scores for August, and how each sentiment category changed from the previous month.
CPT component scores
July → August
Present buyer pipelines: -33 → -41
Future buyer pipelines: +2 → -5
Present seller pipelines: -18 → -18
Future seller pipelines: +2 → +5
This represents a clear downward shift in buyer pipeline conditions — both in the present day and in terms of what is expected to occur over the next 12 months.
The latest numbers appear to confirm last month’s slight improvement in buyer pipelines were a one-month blip. They also contribute to a broader pessimistic trend that has only deepened since the NAR settlement was announced in March.
Notably, agents in August actually reported an uptick in optimism when it comes to their listing pipelines.
35 percent of agents in late August told Intel they expect their seller pipelines will be heavier a year from now — up from 31 percent the previous month.
One possible contributor to this? Recent economic data has made the path ahead clearer for the Federal Reserve.
Inflation has cooled, job growth is slowing and “the time has come for policy to adjust,” Fed Chair Jerome Powell said Aug. 23 at the Jackson Hole economic conference in Wyoming.
That could mean lower rates in the near-to-mid future, softening a stubborn impediment to homeowners swapping their ultra-low mortgage rates for a new loan at today’s prices.
But real estate agents, despite being well aware of these signals, appear to have more pressing issues on their minds.
Trends overshadowed
It’s unclear how much agent pessimism can be attributed to the Aug. 17 deadline, and how much is linked to actual business conditions on the ground.
But looking at the data, there’s a case to be made that both are affecting agent attitudes.
When the NAR settlement is most on the minds of agents, they tend to report a more pessimistic outlook on their future buyer prospects.
The two biggest single-month drops in the future buyer pipeline score each occurred after major developments in the lawsuits:
the largest in late March, when the NAR settlement was first announced and the future buyer pipeline score dropped by 19 points;
and the second-biggest just this past month, when agent sentiment toward future buyer pipelines fell by 7 points immediately after the NAR changes went into effect.
But these aren’t the only factors potentially weighing on agents.
Existing-home sales as reported by NAR continue to come in especially low — at an annualized rate of around 4 million a year or below.
Even in more recent weeks, as mortgage rates continued to drop, buyers were reluctant to apply for purchase loans.
After a brief spike in January, the Mortgage Bankers Association Purchase Loan Index in August fell back down near where it was in October, effectively its lowest point in decades.
All that to say, market forces may be playing a big role in agent assessment of their present-day buyer pipelines, and both may be souring the future outlook, for now.
Methodology notes: This month’s Inman Intel Index survey was conducted Aug. 19-30, 2024, and had received more than 620 responses as of Aug. 26. The numbers used for this article are preliminary and subject to revision. The entire Inman reader community was invited to participate, and a rotating, randomized selection of community members was prompted to participate by email. Users responded to a series of questions related to their self-identified corner of the real estate industry — including real estate agents, brokerage leaders, lenders and proptech entrepreneurs. Results reflect the opinions of the engaged Inman community, which may not always match those of the broader real estate industry. This survey is conducted monthly.
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