Ten-X, the online real estate transaction marketplace, was out Friday with its latest Ten-X Residential Real Estate Nowcast, which reports existing home sales several weeks before the National Association of Realtors report comes out. The report predicts existing home sales will decrease slightly in October to a seasonally adjusted annual rate (SAAR) between 5.2 and 5.49 million with a targeted number of 5.35 million, down 0.8% from NAR’s reported September sales.
“The lack of available inventory is having a major impact on existing home sales, and there’s not much hope for improvement in the foreseeable future,” said Ten-X Executive Vice President Rick Sharga. “New home construction is still lagging behind demand, about one third of current homeowners don’t have enough equity to put their homes on the market, and there appears to be a psychological barrier coming into play, where homeowners aren’t willing to sell their home because they’re afraid there’s nothing for them to buy. Over time these issues will be resolved, but in the meanwhile, it’s hard to see sales numbers improving significantly.”
Last month, the Ten-X Nowcast projected home sales to hover near their current level, a prediction that was confirmed by the recent National Association of Realtors® (NAR®) release, which showed that total existing-home sales edged higher to a 5.39 million seasonally adjusted annual rate in September. This marks a modest 0.7% increase from August’s reported 5.35 million number though still 1.5% lower than a year ago.
“Demand for homes remains solid due to a robust labor market and low mortgage rates,” said Ten-X Chief Economist Peter Muoio. “However, extremely low inventory of homes for sale is a major factor constraining sales and driving up prices, diminishing affordability. High student debt, relatively tight underwriting conditions, and the potential for higher interest rates could further constrain a considerable segment of home buyers.”
