Existing home sales should hopefully perform better in the upcoming February release after plummeting to the lowest rate in nine months, painting a dimmer forecast for the upcoming spring homebuying season.
According to the National Association of Realtors’ January numbers, existing home sales collapsed 4.9% to 4.82 million, well below analyst expectations, led by a massive drop in western regions.
“January’s drop in existing home sales is a bit concerning,” said Bill Banfield, vice president at Quicken Loans, at the time of the release. “Economic indicators and stubbornly-low interest rates would lead most to expect improvement, yet recent housing reports have indicated the opposite. Inventory is a number I’ll be watching in the coming months as it has the power to help existing sales bounce back.”
The next existing home sales report will come out Monday, and while it is not expected to be a significant increase, Zillow (Z) does forecast it will rise 1.3% to 4.88 million seasonally annual rate in February.
Zillow’s forecast uses a best-fit combination of two models, a structural model and a historical modle.
And hopefully this is just the start of more good news.
“Although weak fundamentals – including a falling homeownership rate and flat interest rates – held back sales, there are potentially positive signals for the months ahead,” Zillow said in its forecast report.
Here is Zillow’s chart outlining the past numbers.
Click to enlarge