Photo: Doug Kerr/Flickr
After hitting the second-lowest point in four years last month, existing home sales likely won’t bounce right back, according to Auction.com.
In fact, the online real estate auction house is predicting a sluggish — at least compared with the year leading up to August — recovery for the US housing market for the rest of the year.
In its most recent Nowcast, which is based on industry data, transactions and Google, Auction.com has forecasted existing home sales this month to hit a seasonally adjusted annual rate (SAAR) somewhere between 5.23 and 5.57 million annual sales.
Should sales hit 5.4 million, the midpoint of that range, it would account for a 1.7 percent increase over August. That would be a 5.9 per cent improvement over September 2014, but not enough to make up for last month’s losses.
Total US existing home sales dropped 4.8 percent in August to a SAAR of 5.31 million, down from 5.58 million the month prior, according to the National Association of Realtors.
In a statement, Rick Sharga, Auction.com’s executive vice president, said that decline was unexpected, despite some indications that “the housing market was cooling off.”
“No one anticipated the kind of decline in sales volume that we saw in August,” he added.
Sharga suggested stock market volatility and economic issues in Europe and China negatively impacting foreign investment could be factors that are partly to blame for the decline.
“Since month-to-month sales numbers can vary significantly, this could turn out to be nothing more than a temporary blip on the radar, but it’s certainly worth watching,” Sharga concluded in the statement.
In its Nowcast, Auction.com is forecasting existing home prices to land somewhere between $216,372 and $239,148. The targeted price of $227,760 would be an 8.9 percent increase year-over-year.
Peter Muoio, Auction.com’s chief economist suggested in a statement that US housing market growth would continue, but at a more modest rate.
“All the right underpinnings are in place to support continued demand, from improving labor markets and wage growth to a more approachable lending environment,” said Muoio.
“That said, we’re expecting growth to assume a much more modest pace as we approach the end of 2015.