Existing home sales will slip slightly in May, according to the Residential Real Estate Nowcast from Ten-X, an online real estate transaction marketplace.
The Nowcast shows May home sales will fall between a seasonally adjusted rate of 5.37 and 5.73 million existing home sales, with a targeted number of 5.5 million. This is down 1.2% from the National Association of Realtors’ April sales and down 0.54% from last year’s sales.
“Two consecutive months of weaker existing home sales isn’t cause for panic, but it does suggest that forecasts calling for a robust housing market may have been too optimistic,” Ten-X Executive Vice President Rick Sharga said. “It appears that the combination of extraordinarily low inventory and home price appreciation that continues to outpace wage growth is slowing down sales, especially in some of the country’s higher priced markets.”
Last month, the company predicted home sales would fall between seasonally adjusted rates of 5.4 and 5.76 million with a targeted number of 5.66 million. NAR’s report came in at 5.57 million.
The latest pending home sales report from NAR decreased at the fastest pace since 2014, confirming Ten-X’s forecast that May could see a decrease in existing home sales.
Ten-X predicted the median existing home prices will increase once again in May between $237,570 and $262,577 to a targeted price of $250,074. This represents an increase of 2.2% from the previous month and 4.3% from last year.
“Despite inventory constraints continuing to fuel price gains and curb affordability, demand is healthy and relatively low mortgage rates have enabled more buyers to enter the market,” Ten-X Chief Economist Peter Muoio said. “While there is some uncertainty over the possibility of another rate hike and its impact on affordability, the housing market remains on solid footing supported by a firm labor market and rising wages.”