Global market turmoil coupled with supply and demand troubles have not been enough to restrain home sales, which continue remain on a strong path supported by positive labor gains.
Ten-X's Residential Real Estate Nowcast expects existing-home sales to outperform the previous month in April with a 3.6 percent increase from March and a 7.4 percent year-over-year increase. The company projects that sales will fall between seasonally adjusted annual rates of 5.3 and 5.7 million, with a targeted number of 5.52 million.
Ten-X Chief Economist Peter Muoio explained, “U.S. home sales have recently been subject to volatility on a monthly basis, mostly due to external factors. However, beneath that volatility are clear signs that sales activity is floating at a relatively high level overall. And, while concerns remain over broader trends such as global economic volatility, weak first quarter U.S. GDP growth, and persistently lower oil prices affecting energy-based companies, the U.S. housing market stands firmly on solid ground supported by a solid labor market.”
Existing-home sales have suffered in recent months due to the continuous imbalance of extremely low inventory levels and rapid home price appreciation, but homebuyers overcame the housing market's biggest obstacle in March with a rebound in home sales.
The National Association of Realtors (NAR) reported Wednesday that existing-home sales rose 5.1 percent to a seasonally adjusted annual rate of 5.33 million in March from a downwardly revised 5.07 million in February and 1.5 percent year-over-year. According to NAR, the median existing-home price for all housing types in March was $222,700, up 5.7 percent from $210,700 in March 2015. This marks the 49th consecutive month of year-over-year gains.
Last month’s nowcast was nearly spot on, calling for an increase to 5.32 million units in March and outperforming the consensus estimate of 5.27 million.
"Closings came back in force last month as a greater number of buyers – mostly in the Northeast and Midwest–overcame depressed inventory levels and steady price growth to close on a home," said Lawrence Yun, NAR Chief Economist. "Buyer demand remains sturdy in most areas this spring and the mid-priced market is doing quite well. However, sales are softer both at the very low and very high ends of the market because of supply limitations and affordability pressures."
Expectations for home prices also fell within range, with the nowcast predicting home prices within the range of $209,207 to $231,229. Ten-X expects sales prices for existing homes to fall between $218,770 and $241,798 in the month of April with a targeted price of $230,284, representing 3.4 percent month-over-month and 5 percent year-over-year gains.
"Online activity by prospective home buyers continues to signal the slow but steady growth that we saw in existing home sales during the first quarter of 2016, ” said Ten-X EVP Rick Sharga. “Job creation, wage growth, low interest rates, and stronger household formation numbers are offsetting some of the headwinds that have hampered the housing recovery for the past few years."