According to Ten-X’s Residential Real Estate Nowcast, existing home sales have dropped in October. Based on the seasonally adjusted annual rate (SAAR), between 5.2 and 5.49 million sales are expected in October with the targeted number being 5.35 million. This is down 0.8 percent compared to the National Realtors Association (NAR) reported sales in September.
"The lack of available inventory is having a major impact on existing home sales, and there's not much hope for improvement in the foreseeable future," said Ten-X Executive Vice President Rick Sharga. "New home construction is still lagging behind demand, about one third of current homeowners don't have enough equity to put their homes on the market, and there appears to be a psychological barrier coming into play, where homeowners aren't willing to sell their home because they're afraid there's nothing for them to buy. Over time these issues will be resolved, but in the meanwhile, it's hard to see sales numbers improving significantly."
In September, Ten-X projected total-existing home sales to be around 5.39 million when seasonally adjusted. This was later confirmed by the NAR’s release on existing home sales. This is a 0.7 percent increase compared to August, but still 1.5 percent lower compared to September 2016.
In August 2017, Ten-X also predicted a sturdy gain in existing home prices, later confirmed by the NAR. The median existing-home price in September increased 4.2 percent from to $245,100. This marks the 67th consecutive month of year-over-year price gains. Ten-X predicts annual strides will continue with median existing-home prices landing between $231,897 and $256,308 with a target price point of $244,103. This is down 0.4 percent from September but up 5.1 percent from last year.
"Demand for homes remains solid due to a robust labor market and low mortgage rates," according to Ten-X Chief Economist Peter Muoio. "However, extremely low inventory of homes for sale is a major factor constraining sales and driving up prices, diminishing affordability. High student debt, relatively tight underwriting conditions, and the potential for higher interest rates could further constrain a considerable segment of home buyers."
The full report can be viewed here.