Will Housing Overcome Economic Slowdowns?

The pace of sales of existing homes slowed down in June, but are sill up from May and from last year, according to early projections from Thursday’s Ten-X Residential Real Estate Nowcast. The company expects June’s existing-home sales will fall between seasonally adjusted annual rates of 5.38 and 5.74 million, with a targeted number of 5.56 million. That’s an increase of 0.5 percent increase from May and a 1.4 percent year-over-year gain.

Last month’s Nowcast also called for an increase in May sales between 5.47 and 5.83 million units, with a target of 5.65.

Ten-X’s outlook was based on May figures on existing-home sales issued by the National Association of Realtors (NAR), which recently reported a 4.5 percent year-over-year increase in sales to 5.53 million units in May. That increase over April marked the highest annual sales rate since February of 2007.

The NAR also reported a 4.7 percent year-over-year increase in median existing-home prices to $239,700 for May, marking the 51st consecutive month of year-over-year gains and nearly matching the prediction of $238,418 that Ten-X made in last month’s Nowcast. Findings from the Nowcast suggest that sales prices for existing homes will fall between $231,642 and $256,025 in June, with a targeted price of $243,833. This represents a 1.7 percent month-over-month gain and a 3.1 percent year-over-year gain.

“It will be interesting to see if the recent Brexit vote will have a measurable near-term impact on the U.S. housing market.”

Rick Sharga, Chief Marketing Officer, Ten-X

“Despite facing broader economic headwinds following a disappointing May jobs report, slowing U.S. GDP growth, and uncertainty in global markets, the U.S. housing market remains on solid footing,” said Ten-X Chief Economist Peter Muoio. “We continue to hold a positive outlook for housing supported by accelerating wage growth, an accommodative labor market and low interest rates, though persistent issues with declining affordability and low inventory will likely limit stronger gains in sales.”

Like many in the U.S. housing market of late, Rick Sharga, EVP and Chief Marketing Officer at Ten-X, is wondering how the U.K.’s Brexit vote to leave the European Union will play out.

“It will be interesting to see if the recent Brexit vote will have a measurable near-term impact on the U.S. housing market,” Sharga said. “We could see interest rates reach a new low, possibly stimulating buying activity by improving affordability. Or we could see an influx of foreign capital, as investors look towards U.S. real estate in a flight to safety. Either of these could significantly change the current market trajectory.”

Click here to view the complete Nowcast.