Online real estate marketplace, Auction.com, LLC has revised its July Real Estate Nowcast downward.
According to Auction.com report released Monday, existing home sales in July are now projected to fall between seasonally adjusted annual rates of 5.39 and 5.75 million annual sales with a targeted number of 5.57 million.
Although this is an increase of 1.4 percent from June, it is a more modest increase than the nowcast had previously predicted for July.
Auction.com reported that the projected median sales price for July reflected in the company’s original nowcast released on July 22 remains unchanged at $239,126.
The company blames the downward revision on a shift in online traffic patterns over the last half of July. Originally, Auction.com predicted the total number of existing home sales to fall between 5.49 and 5.84 million annual sales with a targeted number of 5.67 million.
“While we believe that the housing market continues to recover from the most volatile boom and bust cycle we’ve ever seen, that recovery continues to be uneven, taking an occasional step backwards,” said Rick Sharga, Auction.com's EVP. “One potential cause for concern is that as home prices continue to rise – significantly outpacing wage growth – many markets are becoming too expensive for first time buyers to enter, which effectively causes the whole home buying engine to seize up.”
Sharga also expressed concern regarding the Fed’s recent announcement that it is likely to raise interest rates as early as fall, noting, “If mortgage rates rise by as little as a point while home prices continue to go up, the slow but steady housing recovery we’ve been watching could suddenly take a turn for the worst.”
Total existing-home sales, which include single-family homes, townhomes, condominiums, and co-ops, increased 3.2 percent to a seasonally adjusted annual rate of 5.49 million in June from a downwardly revised 5.32 million in May, according to the report. This will make nine consecutive months of year-over-year increases, and sales are 9.6 percent above a year ago at 5.01 million.
"Backed by June's solid gain in closings, this year's spring buying season has been the strongest since the downturn," Yun said. "Buyers have come back in force, leading to the strongest past two months in sales since early 2007," said Lawrence Yun, NAR's chief economist. "This wave of demand is being fueled by a year-plus of steady job growth and an improving economy that's giving more households the financial wherewithal and incentive to buy."
Sales are now at their highest level compared to the 5.79 million total in February 2007, according to NAR. All major regions experienced sales gains in June and have now risen above year-over-year levels for six consecutive months.