Ten-X has released its latest Ten-X Residential Real Estate Nowcast which indicates a modest month-over-month decrease in December existing home sales. According to the nowcast, December sales will fall between seasonally adjusted annual rates of 5.33 and 5.69 million, with a targeted number of 5.51 million – down 1.8 percent from November, but up 0.9 percent from the year ago level.
“It’s possible that we’re seeing the effect of rising mortgage rates slowing down existing home sales,” said Ten-X Executive Vice President Rick Sharga. “It’s also possible that we may see the numbers trend upwards as buyers decide to enter the market before interest rates go even higher.”
The National Association of Realtors (NAR) recently reported that November existing home sales increased to a seasonally adjusted rate (SAAR) of 5.61 million units in November, confirming the strength that the Ten-X Nowcast had previously indicated. This marks a 0.7 percent gain from its downwardly revised 5.57 million October estimate, a 15.4 percent year-over-year increase, and the highest annualized pace seen since February 2007.
“All things considered, 2016 has been a remarkably good year for both existing and new home sales,” Sharga noted. “We’ve seen year-over-year sales increases despite home prices appreciating more rapidly than wage growth, tight credit and limited supply. Clearly, demand remains fairly strong.”
The NAR also recently reported a 6.8 percent year-over-year increase in median existing home prices to $234,900 in November. This increase marked the 57th consecutive month of annual gains and also confirmed the nowcast prediction made in November. The December Ten-X Residential Real Estate Nowcast predicts that median existing-home prices will fall between $221,679 and $245,013 in December with a target price point of $233,346, down 0.7 percent from November, but up 4.1 percent from a year ago.
“As we round out 2016, the U.S. housing market continues to benefit from a strong labor market, as solid job gains, low unemployment and promising wage growth fuel a high level of underlying demand for homes,” said Ten-X Chief Economist Peter Muoio. “While there are still headwinds to sales growth in the way of tight inventory, low affordability and the likelihood of mortgage rate increases, solid fundamentals continue pointing to the overall health of the housing market.”