Ten-X released its latest Ten-X Residential Real Estate Nowcast which indicates a slight decrease in November existing home sales. According to the Nowcast, November sales will fall between seasonally adjusted annual rates of 5.26 and 5.61 million, with a targeted number of 5.43 million – down 3 percent from October, yet still 1.1 percent above a year ago.
“There’s been a lot of month-to-month volatility in both existing and new-home sales recently, and a small drop-off in November after unexpectedly strong October existing home sales would simply continue this pattern,” Ten-X Executive Vice President Rick Sharga said in a press release. “What will be interesting to watch is how the market responds to changing conditions. Will credit become more available if interest rates continue to rise? Will home prices need to slow down, or will they be offset by rising wages? The only certainty is that the 2017 housing market will be fascinating to watch unfold.”
The National Association of Realtors (NAR) recently reported that October sales rose higher than expected, jumping 2 percent to a seasonally adjusted rate (SAAR) of 5.6 million units in October. This is 5.9 percent higher than a year ago, the highest year-over-year growth since February 2007.
The NAR also reported a 6 percent year-over-year increase in median existing home prices to $233,200 in October. This increase marked the 56th consecutive month of annual gains and fell within the Nowcast range of $214,269 and $236,824. The Nowcast predicts that median existing-home sales will temper in November, falling between $220,691 and $243,922 with a target price point of $232,306. That would be up 5.4 percent from a year earlier.
“October sales jumped higher than expected as we continue to see the zig zag pattern caused by the strong demand coupled with tight inventory,” said Ten-X Chief Economist Peter Muoio, noting that a firm labor market, low unemployment, wage growth, and low mortgage rates continue to be driving forces in the housing market. “The expected uptick in mortgage rates could create additional constraints in the market, but we could first see an initial rush to close before rates move higher. It's too early to fully gauge the potential 2017 impact.”