The Ten-X Residential Real Estate Nowcast indicates a slight decrease in June existing home sales. According to the nowcast, June sales will hit a seasonally adjusted annual rate (SAAR) between 5.28 and 5.64 million with a targeted number of 5.49 million, down 2.3 percent from NAR’s reported May sales and down 0.7 percent from a year ago.
“Pending home sales numbers, mortgage applications and online search activity all suggest that the market for existing home sales may be cooling off slightly as we enter the summer months,” said Ten-X Executive Vice President Rick Sharga. “It’s possible that home purchases in the first half were accelerated by consumers trying to get deals done before interest rates increased. If that’s the case, we may see existing home sales plateau for the balance of 2017.”
Last month, the Ten-X Nowcast projected home sales to remain near their cycle highs, aligning with the recent the National Association of Realtors (NAR) release, which showed a minor uptick in home sales from the month prior. NAR reported that existing home sales in May rose to 5.62 million units, a 1.1 percent gain from a downwardly revised 5.56 million in April. After the uptick, home sales are now 2.7% higher than a year ago.
Last month’s Ten-X Nowcast also predicted another solid year-over-year gain in existing home prices, which was confirmed by the NAR report, as the median existing home price for all housing types rose 5.8 percent year-over-year to $252,800 in May. This marks the 63rd consecutive month of year-over-year price gains. The May Ten-X Residential Real Estate Nowcast predicts that median existing home prices will continue to make annual strides falling between $244,194 and $269,899 with a target price point of $257,046, up 1.7 percent from May and a 3.8 percent gain from last year.
“While sales keep edging up, historically low inventory levels continue to restrain the pace of growth. Meanwhile, intensifying competition between owner-occupants and increasingly active investors amid the low inventory situation, are generating substantial price increases,” said Ten-X Chief Economist Peter Muoio. “This price appreciation is beneficial for existing homeowners, but will continue to affect affordability. As long as the labor market remains strong and wages continue to increase, the housing market will remain on solid footing.”