Ten-X, an online real estate transaction marketplace, has released its latest Ten-X Residential Real Estate Nowcast, which projects continued cooling for existing home sales in September. According to the Nowcast, September sales will fall between seasonally adjusted annual rates of 5.1 and 5.44 million, with a targeted number of 5.27 million – down 1.2 percent from August and 5.1 percent from a year ago.
These findings follow yet another month of lackluster housing market performance in August. The National Association of Realtors (NAR) recently reported a .09 percent dip in August existing home sales to 5.33 million units (SAAR). Though sales have declined for two consecutive months, they remain 0.8 percent higher than a year ago.
“After a strong start to 2016, the housing market has settled back into the kind of slow, gradual recovery we've seen over the past few years,” Ten-X Executive Vice President Rick Sharga said in a press release. “Three powerful headwinds continue to hamper the recovery: extraordinarily low inventory – especially for entry level buyers; rising home prices, which are beginning to affect affordability in certain markets; and unusually tight credit, which makes borrowing difficult for all but the most highly qualified borrowers.”
The NAR also recently reported a 5.1 percent year-over-year increase in median existing home prices to $240,200 for August, marking the 54th consecutive month of year-over-year gains and falling within the range of $235,843 - $260,669 that Ten-X predicted in last month’s Nowcast.
Findings from the Ten-X Residential Real Estate Nowcast suggest that September sales prices for existing homes will fall between $227,305 and $251,232 with a targeted price of $239,268, representing a 7.8 percent year-over-year gain.
“Though monthly home sales seem to be cooling with the end of summer, high overall sales and continued home price growth signal solid underlying demand,” Ten-X Senior Quantitative Strategist Christopher Muoio said. He noted a firm labor market, wage growth, low unemployment, and low mortgage rates remain supportive of home buying.
“It’s still too soon to say whether the recent two-month dip in sales activity is simply a matter of persistently low inventories and affordability concerns, or a sign of any larger trend,” he concluded.