Existing home sales in March are expected to increase, based on trends in the latest Residential Nowcast report by Ten-X.
The new report showed a slight increase in existing home sales and predicted that March sales will fall between seasonally adjusted annual rates of 5.41 and 5.77 million, with a targeted number of 5.59 million. If that holds true, it would be a 2 percent increase from sales reported in February by the National Association of Realtors.
The March Nowcast predicts that median existing-home sales will continue to make annual strides in March, falling between $220,885 to $244,136 with a target price point of $232,511. That’s up 1.8 percent from February and 4.4 percent from last year's NAR figure.
"As we enter the important spring selling season, consumer demand appears to be strong," said Ten-X Executive Vice President Rick Sharga. “The big question is whether there will be enough homes for sale to meet that demand.”
Sharga said the underlying fundamentals of the market‒‒job and wage growth‒‒remain solid, while interest rates remain low despite a slight increase from the Federal Reserve. At the same time, a familiar refrain:
“Inventory‒‒especially of entry-level homes‒‒remains stubbornly low," Sharga said.
"As inventory supply continues to constrain the housing market, housing demand and home price growth continue to be strong, creating affordability concerns in some markets," said Peter Muoio, chief economist at Ten-X. "It's possible that higher mortgage rates may contribute to more affordability obstacles for would-be homebuyers. In the meantime, the US housing market will continue to forge ahead in a jagged fashion as the solid labor market supports demand."
The projected uptick is a reversal of last month’s prediction by Ten-X that existing home sales would take a step back from their cyclical high. A month ago, NAR reported that existing home sales in February retreated to a seasonally adjusted rate of 5.48 million units, down 3.7 percent from January although still up 5.4 percent from a year earlier.
Last month's Ten-X Nowcast also predicted another solid year-over-year gain in existing home prices, later confirmed by the NAR report. The median existing-home price for all housing types rose 7.7 percent year-over-year to $228,400 in February. This, according to Ten-X, marks the 60th consecutive month of year-over-year price gains.