February Existing Home Sales Decline

Ten-X has released its latest Ten-X Residential Real Estate Nowcast, which indicates a slight decline in February existing home sales. According to the nowcast, February sales will fall between seasonally adjusted annual rates of 5.34 – 5.69 million, with a targeted number of 5.51 million – down 3 percent from NAR’s reported January sales yet up 7 percent from a year ago.

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“At some point, rising prices, higher interest rates, and limited inventory will begin to take their toll on home sales,” said Ten-X Executive Vice President Rick Sharga. “While online search activity remains strong, indicating healthy demand for homes, the relatively weak numbers in both new home sales and pending sales of existing homes suggest that buyers may be having trouble finding properties. But monthly housing numbers are notoriously volatile, so it’s too soon to say whether we’re seeing an inflection point, or the market is just taking a breath before coming back strongly in the spring.”

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The National Association of Realtors (NAR) recently reported that existing home sales saw strong growth in January, confirming the uptick the Ten-X Nowcast had previously indicated and even slightly exceeding those expectations. Existing home sales rose to a seasonally adjusted rate (SAAR) of 5.69 million units, up 3.3 percent from December and 3.8 percent from a year ago – its highest level since February 2007.

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The NAR also recently reported a 7.1 percent year-over-year increase in median existing home prices to $228,900 in January. This increase marked the 59th consecutive month of annual gains and also confirmed the nowcast prediction made in January. The February Ten-X Residential Real Estate Nowcast predicts that median existing-home sales will continue to make annual strides in February, falling between $220,056 – $243,220 with a target price point of $231,638 up 1.2 percent from January and up a substantial 9.9 percent from last year’s NAR figure.
“Though inventory constraints have hampered stronger sales growth and fueled a surge in prices, the housing market continues to benefit from healthy underlying demand bolstered by a solid labor market that boasts healthy job gains, low unemployment and wage growth,” said Ten-X Chief Economist Peter Muoio. “Looking forward, it’s possible that higher mortgage rates may create yet another affordability obstacle for would-be homebuyers. In the meantime, 2017 home sales appear to be advancing at a healthy pace.”