Auction.com Predicts Existing-Home Sales Will Be Flat In January

Posted by Patrick Barnard on January 27, 2015 No Comments
Categories : Residential Mortgage

January existing-home sales will come in flat compared to December but will be up year over year compared to January 2014, according to Auction.com's Real Estate Nowcast, a monthly forecast of housing market trends.

For January, Auction.com predicts that existing-home sales will be at an annual rate of about 5.06 million units, compared to December's 5.04 million units.

‘There's nothing pointing toward a quantum leap in January home sales,’ says Rick Sharga, executive vice president for Auction.com, in the report. ‘Demand continues to be tepid, reflected by the relatively weak search activity that we're tracking in Google Trends data. And inventory levels of available homes continue to fall, which means that even if demand picks up, there might not be enough homes to meet it.’

According to the National Association of Realtors (NAR), existing-home sales reached 5.04 million units in December, up 2.4% from a downwardly revised 4.92 million in November and up 3.5% compared to December 2013. After falling 6.1% in November, existing-home sales were at a seasonally adjusted annual rate of 5.04 million in December, according to NAR.

Auction.com continues to tout the accuracy of its Nowcast report, which predicted that existing-home sales for December would be 4.98 million.

‘The existing-home sales pace of the past several months shows that housing has shaken off the weakness it experienced in 2013 and early 2014,’ says Peter Muoio, chief economist for Auction.com. ‘But difficult mortgage conditions, stagnant wages and lingering wariness about homeownership benefits have kept annual sales right around 5 million units, where they've been for the past few years.’

Muoio also cited potential fallout from weaker economies in the oil-producing states, particularly Texas, as a concern for the housing market in 2015.

‘White-hot sales growth in Texas has well outpaced U.S. existing-home sales growth over the past three years, pushing the Texas share of U.S. existing-home sales up to a near-record 6.2 percent,’ he says. ‘Low oil will cool the Texas economy and, with it, home sales within the state, exerting a drag on U.S. sales in 2015.’

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