In the latest Residential Real Estate Nowcast released by Auction.com, the existing-home sales in November were projected to fall between the seasonally adjusted annual rates of 5.19 and 5.54 million annual sales, with a targeted number of 5.36 million, which is relatively flat from October, but up 8.4 percent year-over-year.
"People looking to buy a home today face dual constraints - extraordinarily low inventory and extremely tight credit," said Auction.com's Executive Vice President, Rick Sharga. "But demand may be weakening as well, since the number of first-time homebuyers continues to be lower than normal, and purchases by investors - especially investors from China and Europe - appear to be slowing down a little bit as well. It will be interesting to see what happens to [the] demand if the Fed raises rates in December and lenders respond by hiking mortgage interest rates."
According to their press release in PR Newswire, the sales of existing homes in the United States have stalled in May with an average of 5.45 million annual sales pace, while ranging between 5.30 million in August and 5.58 million in July.
Chief Economist for Auction.com, Peter Muoio, said that the sudden pause in existing home sales during that period is a surprise. He noted that, "the plateau corresponds with a soft spot in the economy, some downshifting in job growth, and the financial market turbulence experienced in late Summer."
"The renewed strength of the labor market, including accelerating wage gains, should be good news for the housing market heading into 2016," added Muoio. "We continue to look for higher home prices to coax more sellers into the market. Along with wages, this could be an important new ingredient to the 2016 housing story."
In the October report of the National Association of Realtors, the median price of existing homes were at $219,600 - within the range of $214,269 - $236,824 that Auction.com predicted last month. Following the recent trend, Auction.com then predicts that the sales prices for existing homes will fall between $214,057 and $236,589 in the month of November.
