Ten-X, the online real estate transaction marketplace, projects September existing home sales will fall between seasonally adjusted annual rates of 5.1 and 5.44 million, with a targeted number of 5.27 million – down 1.2% from August and 5.1% from a year ago.
These findings follow yet another month of lackluster housing market performance in August. The National Association of Realtors® (NAR®) recently reported a .09% dip in August existing home sales to 5.33 million units (SAAR). Though sales have declined for two consecutive months, they remain 0.8% higher than a year ago.
"After a strong start to 2016, the housing market has settled back into the kind of slow, gradual recovery we've seen over the past few years," said Ten-X Executive Vice President Rick Sharga. "Three powerful headwinds continue to hamper the recovery: extraordinarily low inventory – especially for entry level buyers; rising home prices, which are beginning to affect affordability in certain markets; and unusually tight credit, which makes borrowing difficult for all but the most highly qualified borrowers."
The NAR also recently reported a 5.1% year-over-year increase in median existing home prices to $240,200 for August, marking the 54th consecutive month of year-over-year gains and falling within the range of $235,843 - $260,669 that Ten-X predicted in last month's Ten-X Residential Real Estate Nowcast. Findings now suggest that September sales prices for existing homes will fall between $227,305 and $251,232 with a targeted price of $239,268, representing a 7.8% year-over-year gain.
"Though monthly home sales seem to be cooling with the end of summer, high overall sales and continued home price growth signal solid underlying demand," said Ten-X Senior Quantitative Strategist Christopher Muoio, noting that a firm labor market, wage growth, low unemployment, and low mortgage rates remain supportive of home buying. "It's still too soon to say whether the recent two-month dip in sales activity is simply a matter of persistently low inventories and affordability concerns, or a sign of any larger trend."