Existing-home sales will reach a seasonally adjusted annual rate of between 5.46 million and 5.86 million in August, with a targeted number of 5.64 million, Auction.com's Real Estate Nowcast predicts.
That's an increase of 1.0% compared to July and an increase of 12.9% compared to August 2014. What's more, it is the strongest year-over-year gain in nearly two years, according to the report.
Rick Sharga, executive vice president of Auction.com, says although existing-home sales are stronger now than they were a year ago, the pace is expected to slow in the second half.
‘We may be looking at the beginning of a shift in existing-home sales activity,’ Sharga says in a release. ‘The volume of sales, while continuing to increase, appears to be slowing down. And home prices, which have consistently appreciated over the past few years, may finally be leveling off.’
The National Association of Realtors (NAR) reports that existing-home sales in July reached an annual pace of about 5.59 million units, an increase of 10.3% compared to July 2014. That's in line with Auction.com's estimate of 5.57 million units – a prediction that beat the consensus estimate calling for a 1.6% decrease to 5.40 million units.
‘Limited inventory of homes for sale, especially entry-level homes for first-time home buyers, will make it hard for the market to reach higher numbers in 2015,’ Sharga says. ‘This is true for both existing-home sales and new home sales, where inventory is improving but still near a 40-year low.’
Rising home prices will likely be a factor in the slowing of home sales in the second half. NAR reports that the average price for a home in July was $234,000, an increase of 5.6% compared to July 2014. This is just 5.1% off the peak average home price seen in 2006.
Auction.com predicts that the average price for an existing home in August will fall between $219,132 and $242,199, with a targeted price of $230,666. This represents a 1.4% decrease compared to July but a 5.6% increase compared to August 2014.