Uncertainty grew among real estate professionals during the third quarter, according to the latest Real Estate Sentiment Index released by First American Financial Corp., a provider of title insurance, settlement services and risk solutions.

Overall, real estate professionals lost confidence in transaction volume growth over the next 12 months. The survey of Real Estate agents showed confidence fell 4.8% from the second quarter and 9.7% from last year.

The RESI is based on a quarterly survey of independent title agents and other real estate professionals, providing a unique gauge on the real estate market using the crowd-sourced wisdom and expertise of real estate experts.

First American explained that while confidence is falling, it is still strong due to strong demand from Millennial homebuyers.

“Strong Millennial demand continues to keep expectations for purchase volume growth positive overall, while expectations for a rate increase in September may be causing refinance expectations to fall,” said First American Chief Economist Mark Fleming.

For purchase transaction volume over the next 12 months, confidence dropped among real estate professionals by 5.6% from last year, but increased 0.2% from last year.

However, confidence in refinance transaction volume over the next 12 months decreased 3.8% from last quarter and plummeted 20% from last year.

“In many parts of the nation, the 2017 housing market has been defined by the shrinking number of homes for sale amid strong demand,” Fleming said. “In the third quarter RESI survey, 66% of title agents and real estate professionals indicated that there is a shortage of inventory of homes for sale in their home markets.”

Fleming explained this shortage of inventory is pushing home prices higher, and these rising home prices are creating an increasing lack of confidence in transaction volume growth.

“So, if home prices are increasing, what’s preventing homeowners from selling their homes? Title agents and real estate professionals were also asked to identify what they believe is the top reason for the lack of inventory in their markets,” he said. “Almost half of the respondents cited that existing homeowners are worried that they will not be able to find something to buy as the main reason.”