The latest Ten-X Residential Real Estate Nowcast indicates a slight decrease in November existing home sales as November sales fall between seasonally adjusted annual rates of 5.26 and 5.61 million, with a targeted number of 5.43 million – down 3% from October, yet still 1.1% above the year ago level.
“There’s been a lot of month-to-month volatility in both existing and new home sales recently, and a small drop-off in November after unexpectedly strong October existing home sales would simply continue this pattern,” said Ten-X Executive Vice President Rick Sharga. “What will be interesting to watch is how the market responds to changing conditions. Will credit become more available if interest rates continue to rise? Will home prices need to slow down, or will they be offset by rising wages?”
The National Association of Realtors® (NAR®) recently reported that October sales rose higher than expected, jumping up two percent to a seasonally adjusted rate (SAAR) of 5.6 million units in October. This is 5.9% higher than a year ago, the highest year-over-year growth recorded since February 2007.
The NAR also recently reported a 6% year-over-year increase in median existing home prices to $233,200 in October. This increase marked the 56th consecutive month of annual gains and fell within the nowcast range of $214,269 and $236,824. The November Ten-X Residential Real Estate Nowcast predicts that median existing-home sales will temper in November, falling between $220,691 and $243,922 with a target price point of $232,306. While just marginally higher than October, this represents annual gains of 5.4%.
“October sales jumped higher than expected as we continue to see the zig-zag pattern caused by the strong demand coupled with tight inventory,” said Ten-X Chief Economist Peter Muoio, noting that a firm labor market, low unemployment, wage growth, and low mortgage rates continue to be driving forces in the housing market. “The expected uptick in mortgage rates could create additional constraints in the market, but we could first see an initial rush to close before rates move higher. It’s too early to fully gauge the potential 2017 impact.”
