Auction.com, LLC, an online real estate marketplace, has released its latest Auction.com Residential Real Estate Nowcast projecting existing home sales for the month of November will fall between seasonally adjusted annual rates of 5.19 and 5.54 million annual sales, with a targeted number of 5.36 million – relatively flat from October, though up 8.4 percent year-over-year.
“People looking to buy a home today face dual constraints – extraordinarily low inventory and extremely tight credit,” Auction.com Executive Vice President Rick Sharga said in a news release. “But demand may be weakening as well, since the number of first-time homebuyers continues to be lower than normal, and purchases by investors – especially investors from China and Europe – appear to be slowing down a little bit as well. It will be interesting to see what happens to demand if the Fed raises rates in December and lenders respond by hiking mortgage interest rates.”
Earlier this month, the National Association of Realtors (NAR) released its existing home sales data for October, reporting a 3.4 percent decrease in home sales to 5.36 million units, a 3.9 percent increase from the year-ago level and well within the range of 5.26-5.51 million units that Auction.com predicted last month.
Existing home sales gains have stalled since May, averaging a 5.45 million annual sales pace and ranging between 5.30 million in August and 5.58 million in July. This period of pause comes as little surprise, according to Auction.com Chief Economist Peter Muoio, who noted that the plateau corresponds with a soft spot in the economy, some downshifting in job growth and the financial market turbulence experienced in late summer.
“The renewed strength of the labor market, including accelerating wage gains, should be good news for the housing market heading into 2016,” Muoio said. “We continue to look for higher home prices to coax more sellers into the market. Along with wages, this could be an important new ingredient to the 2016 housing story.”
Existing home prices now stand at a new cyclical high and continue to close in on the pre-bust all-time high of a seasonally adjusted $229,875 posted in July 2011. NAR recently reported a 5.8 percent year-over-year increase in median existing home prices in October to $219,600 – within the range of $214,269-$236,824 that Auction.com predicted last month.
Findings from the Auction.com Real Estate Nowcast suggest that sales prices for existing homes will fall between $214,057 and $236,589 in the month of November, with a targeted price of $225,323. This represents an 8.7 percent year-over-year increase.