For the third consecutive month, the diffusion index for foot traffic held roughly steady. This plateau follows a sharp mid-summer decline in the wake of a 1% increase in mortgage rates. Rates eased in October, but crept upward in late November, which could weigh on future trends.

For the third consecutive month, the diffusion index for foot traffic held roughly steady. This plateau follows a sharp mid-summer decline in the wake of a 1% increase in mortgage rates. Rates eased in October, but crept upward in late November, which could weigh on future trends.



Every month SentriLock, LLC. provides NAR Research with data on the number of properties shown by a REALTOR®. Foot traffic has a strong correlation with future contracts and home sales, so it can be viewed as a peek ahead at sales trends two to three months into the future. For the month of November, the diffusion index for foot traffic eased 2.5 points to 48.1.

Mortgage rates started the month low, but ticked upward in the later part of November on positive economic news and anticipation of a potential taper of asset purchases by the Federal Reserve. However, foot traffic held relatively steady for the 3rd consecutive month. Inventories remain tight in some markets like San Diego, which would constrain an increase in local foot traffic. But several markets across the Midwest have slowed relative to last year. Markets that continue to expand are doing so modestly.

The index eased just under the “50” mark in November which indicates that more than half of the markets in this panel had stronger foot traffic in November of 2013 than the same month a year earlier. This reading does not suggest how much of a decrease in traffic there was, just that the majority of markets experienced less foot traffic in November of 2013 compared to a year earlier.

The post-rate-spike recovery appears to have taken root. However, rates did ease in October and early November. Still, traffic remained strong despite the disruption of the government shutdown. Rates have since increased closer to 4.5% which could weigh on traffic in the coming months if the increases continue.