An early forecast of existing-home sales projects a minor bump in transaction activity this month following December's modest gain.
Based on company transactional data and Google search activity, Auction.com predicted Monday that existing-home sales in January will come in at a seasonally adjusted annual rate of 5.06 million, just slightly above the National Association of Realtors' (NAR) December estimate of 5.04 million. The company's range of predictions includes a lower forecast of 4.90 million annual sales and an upper forecast of 5.21 million sales.
"There's nothing pointing towards a quantum leap in January home sales," said Rick Sharga, EVP for Auction.com. "Demand continues to be tepid, reflected by the relatively weak search activity that we're tracking in Google Trends data. And inventory levels of available homes continue to fall, which means that even if demand picks up, there might not be enough homes to meet it."
In its latest look at resale data, NAR reported that the stock of available existing homes for sale was around 1.85 million in December, putting the national supply at 4.4 months at the current sales rate.
Also challenging the housing market right now are stringent credit conditions, stagnant wages, and "lingering wariness about homeownership benefits," said Auction.com's chief economist, Peter Muoio.
Oil-producing states also have their own problems to contend with prices per barrel on the decline.
"White-hot sales growth in Texas has well outpaced U.S. existing home sales growth over the past three years, pushing the Texas share of U.S. existing home sales up to a near-record 6.2 percent," Muoio said. "Low oil will cool the Texas economy and likely with it home sales within the state, exerting a drag on U.S. sales in 2015."