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Are Increased Home Sales Enough to Bolster the Market?

House fo Sale Two BHHome sales in October should dip slightly from last month, according to the newest Ten-X Residential Real Estate Nowcast. Ten-X said October sales will fall between seasonally adjusted annual rates of 5.21 and 5.56 million, and likely close to 5.38 million. That’s down 1.6 percent from September but up .5 percent from a year ago.

Ten-X partly cited numbers from the National Association of Realtors, which recently reported that sales in September rose 3.2 percent to 5.47 million units. That’s a 0.6 percent year-over-year increase, but is still below this year's highest pace of 5.57 million units in June.

"As we move into the fourth quarter, it looks like both existing home and new home sales are going to finish the year pretty much where they were predicted to be at the beginning of the year‒‒around 5.4 million existing home sales and between 550 to 600 thousand new home sales," said Ten-X executive vice president Rick Sharga. "Stubbornly low inventory and tight credit have combined to prevent a more robust housing market recovery in 2016, and it seems likely that 2017 will be more of the same."

The NAR also recently reported a 5.6 percent year-over-year increase in median existing home prices (to $234,200 nationally) in September. The growth marks the 55th consecutive month of year-over-year gains. Ten-X anticipates that October’s median price will land somewhere $233,452. In September, Ten-X’s Nowcast report  anticipated a range of $227,305 to $251,232.

"Both the September NAR numbers and October Nowcast show that sales are returning to the higher end of our expected range for the year," said Ten-X chief economist Peter Muoio. Muoio also said that a firm labor market, low unemployment, wage growth, and low mortgage rates continue to bolster housing demand.

"Tight inventory levels continue to be a restraining factor, but the recent uptick of available homes continues to follow our expectation that higher prices will induce more listings," he said.

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