On a wider scale, Auction.com projects that existing home sales for the month of October will fall between seasonally adjusted annual rates of 5.26 and 5.61 million annual sales, with a targeted number of 5.44 million. This is 2 percent below September’s number, but still in line with sales recorded during the early summer months.
“Challenges on both the supply and demand side appear to be slowing down existing home sales,” said Rick Sharga, Auction.com, EVP, “Inventory levels remain stubbornly low, especially for entry-level buyers, despite rising home prices, and credit is still very tight for the average borrower. The good news is that, considering the weaker than expected jobs numbers, and the usual seasonal dip in purchase activity, it doesn’t appear that sales will fall off significantly for the balance of the year.”
Existing-home sales reversed the downward trend recorded in August due to stock market declines, and rose 4.7 percent to a seasonally adjusted annual rates of 5.55 million in September, the highest pace since February 2007.
The National Association of Realtors (NAR) reported that September's rebound in existing-home sales marks a year-over-year increase for 12 consecutive months and all four major regions experienced gains.
Consumers received an added boost of confidence to purchase a home from the slight moderation in home prices and low mortgage rates last month, says Lawrence Yun, NAR chief economist.
"While current price growth around 6 percent is still roughly double the pace of wages, affordability has slightly improved since the spring and is helping to keep demand at a strong and sustained pace," Yun said.
This report confirmed Auction.com’s that August’s apparent decline was an aberration.
In addition, Auction.com also believes that home prices will continue to rise in October, falling between $214,269 and $236,824 for the month, with a targeted price of $225,546. This represents an 8.7 percent year-over-year increase.
The NAR report for September also found that the median existing-home price for all housing types was $221,900, 6.1 percent above the $209,100 recorded during the same period last year.
“The recent drop in housing followed by what appears to be a return to modest growth reminds all of us of a key economics lesson: to not overreact to a single month of data,” said Peter Muoio Auction.com, chief economist. “While last month’s housing data caused a bit of a stir among economists, industry professionals and the media, the fact is the housing market remains strong. The recent weakening of job growth is something that we are watching closely for any impact on home demand, but consumer confidence continues to rise and households are noticeably benefitting from lower energy prices.”
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