March Existing Home Sales Increase As Prices Rise
Wednesday, April 12th, 2017
Ten-X, the nation's leading online real estate transaction marketplace, has released its latest Ten-X Residential Real Estate Nowcast which indicates a slight increase in existing home sales. According to the nowcast, March sales will fall between seasonally adjusted annual rates of 5.41 – 5.77 million with a targeted number of 5.59 million, up 2.0 percent from NAR's reported February sales and up 4.6 percent from a year ago.
"As we enter the important Spring selling season, consumer demand appears to be strong. The big question is whether there will be enough homes for sale to meet that demand," said Ten-X Executive Vice President Rick Sharga. "The underlying fundamentals of the market remain solid: job and wage growth are strong and interest rates remain low despite a slight uptick after the Fed move. But inventory - especially of entry-level homes - remains stubbornly low."
Last month, the Ten-X Nowcast projected home sales to take a step back from their cyclical high and the recent report from The National Association of Realtors confirmed this. NAR reported that existing home sales in February retreated to a seasonally adjusted rate of 5.48 million units, down 3.7 percent from January although still up 5.4 percent from 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 7.7 percent year-over-year to $228,400 in February. This marks the 60th consecutive month of year-over-year price gains. The March Ten-X Residential Real Estate Nowcast predicts that median existing-home sales will continue to make annual strides in March, falling between $220,885 - $244,136 with a target price point of $232,511 up 1.8 percent from February and up 4.4 percent from last year's NAR figure.
"As inventory supply continues to constrain the housing market, housing demand and home price growth continue to be strong, creating affordability concerns in some markets," said Ten-X Chief Economist Peter Muoio. "Looking forward, it's possible that higher mortgage rates may contribute to more affordability obstacles for would-be homebuyers. In the meantime, the US housing market will continue to forge ahead in a jagged fashion as the solid labor market supports demand."
