October Existing-Home Sales Dropped About 2.0%, Auction.com Forecasts

Posted by Patrick Barnard on November 04, 2015 No Comments
Categories : Residential Mortgage

Existing-home sales in October were at an annual rate of about 5.44 million – down 2% compared with September, according to Auction.com's Real Estate Nowcast.

Auction.com notes that despite the forecasted drop, existing home sales for October will still be in line with early summer sales.

‘Challenges on both the supply and demand side appear to be slowing down existing home sales,’ explains Rick Sharga, executive vice president for Auction.com, in a release. ‘Inventory levels remain stubbornly low, especially for entry-level buyers, despite rising home prices, and credit is still very tight for the average borrower. The good news is that, considering the weaker than expected jobs numbers, and the usual seasonal dip in purchase activity, it doesn't appear that sales will fall off significantly for the balance of the year.’

The National Association of Realtors (NAR) reports that existing-home sales for September reached an annual rate of about 5.55 million, an increase of 4.7% compared with August.

Auction.com notes that existing-home sales in August were abnormally low – therefore, the 4.7% month-over-month increase in September was basically an aberration.

‘The recent drop in [existing-home sales in August] followed by what appears to be a return to modest growth reminds all of us of a key economics lesson: to not overreact to a single month of data,’ says Peter Muoio, chief economist for Auction.com. ‘While [recent] housing data [have] caused a bit of a stir among economists, industry professionals and the media, the fact is the housing market remains strong. The recent weakening of job growth is something that we are watching closely for any impact on home demand, but consumer confidence continues to rise and households are noticeably benefiting from lower energy prices.’

NAR reports that the average price for a single-family home in September was about $227,760, an increase of 6.1% compared with an average price of $221,900 in September 2014.

Auction.com forecasts that the average price for a single-family home will reach $225,546 in October, an increase of 8.7% year-over-year compared with October 2014.

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