Residential property sales have decreased seasonally adjusted annual rates of 5.26 and 5.61 million, according to the November Ten-X Residential Real Estate Nowcast.
Home sales have fallen 3 percent from October, but have increased 1.1 percent increase from November 2015. Peter Muoio, Chief Economist for Ten-X, indicated low employment, wage growth, stable labor market, and low mortgage rates that contributed to the drop in home sales.
"October sales jumped higher than expected as we continue to see the zig zag pattern caused by the strong demand coupled with tight inventory," he said. "The expected uptick in mortgage rates could create additional constraints in the market, but we could first see an initial rush to close before rates move higher. It's too early to fully gauge the potential 2017 impact."
October brought higher home sales numbers than anticipated with a 2 percent increase from the previous month and a 5.9 percent increase from the same month in 2015. According to The National Association of Realtors (NAR), the price of homes in October 2015 compared to the previous year was the highest year-over-year increase since February 2007.
The median price of existing homes also rose significantly in October, with a 6 percent year-over-year increase in median existing home prices to $233,200. The November Ten-X Residential Real Estate Nowcast is foreseeing a decrease in median existing-home sales, falling between $220,691 and $243,922.
According to Freddie Mac, mortgage rates have increased by 51 basis points since the presidential election and at 4.08 percent are at their highest level in 16 months. They may increase further if the Federal Reserve raises short-term interest rates later this month.
Rick Sharga, EVP of Ten-X, questioned the state of the changing housing market and seeks answers to the future of the housing economy.
"There's been a lot of month-to-month volatility in both existing and new home sales recently, and a small drop-off in November after unexpectedly strong October existing home sales would simply continue this pattern," he said. "What will be interesting to watch is how the market responds to changing conditions. Will credit become more available if interest rates continue to rise? Will home prices need to slow down, or will they be offset by rising wages? The only certainty is that the 2017 housing market will be fascinating to watch unfold."
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