January will see an annual increase in existing home sales and will remain level with the number of homes sold in December, according to the latest Residential Real Estate Nowcast, a forecast from Ten-X, an online real estate transaction marketplace.
The Nowcast shows existing home sales will increased to seasonally adjusted rates of between 5.32 and 5.67 million, with a targeted number of 5.49 million. This is the same number of homes sold in December, but up 30,000 from the previous year.
“The good news is that it looks like 2017 is getting off to a slightly better start than 2016 did, and existing home sales are staying at a healthy level,” Ten-X Executive Vice President Rick Sharga said.
“But there are plenty of challenges facing the housing market this year, including incredibly low inventory of homes for sale, rising home prices and higher interest rates,” Sharga said. “Still, we’re cautiously optimistic that the market will improve slightly on a year-over-year basis.”
And Ten-X isn’t the only one with high hopes for January. Another company, realtor.com, explains that while January is normally a slow-down month for real estate, that has not been the case this year.
The National Association of Realtors reported a downtick in December’s existing home sales to 5.49 million sales, following the decrease predicted by the Ten-X Nowcast. December’s existing home sales are only slightly off from Ten-X’s targeted number of 5.51 million.
The Nowcast for January predicts that home prices will increase to between $221,272 and $244,564 with a targeted price point of $232,918, an increase of 0.3% from December’s $232,200 and up 8.9% from last January.
“As we predicted, U.S. home sales bounced around at a high level throughout 2016,” Ten-X Chief Economist Peter Muoio said. “Homebuyer demand remained elevated throughout the year driven by a healthy labor market, low mortgage rates, low unemployment and rising wages.”
“Though a historically low inventory of homes has dampened sales growth and fueled a surge in prices, the housing market continues to benefit from healthy underlying demand in the face of rising mortgage rates,” Muoio said.