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Auction.com: April existing-home sales forecasted to continue rising

Pent-up demand boosts sales

Existing-home sales for April are forecasted to continue to increase, but at a much slower pace than March’s giant surge, according to Auction.com’s Real Estate Nowcast.

The Nowcast predicts that existing-home sales will fall between seasonally adjusted annual rates of 5.15 and 5.47 million annual sales, with a targeted number of 5.31 million – up 2.3% from March and 11.8% from a year ago.

The latest March report from the National Association of Realtors posted that existing-home sales surged to their highest annual rate in 18 months.

Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, jumped 6.1% to a seasonally adjusted annual rate of 5.19 million in March from 4.89 million in February — the highest annual rate since September 2013 (also 5.19 million).

“Among the factors contributing to the jump in March's existing home sales, pent-up demand from weak sales in January and February probably played a significant role,” explained Auction.com Executive Vice President Rick Sharga. “Consumer psychology is likely also at play here: with talk of the Fed hiking interest rates as early as June, buyers who've been sitting on the sidelines may have decided to buy now and lock in today's historically low interest rates.”

But, he also issued a reminder to keep the recent data in perspective, noting, “While the surge in home sales is indeed welcome news to the housing market, it’s important to keep the March numbers in context: in a truly healthy housing market, we'd be on pace for 6 million existing home sales. All March did was get us more or less back into the 5 million range, where we'll probably remain for the next year.”

Findings from the Auction.com Real Estate Nowcast suggest that sales prices for existing homes will fall between $201,052 and $222,215 during the month of April, with a targeted price of $211,633. This represents a 5% year-over-year increase for the month.

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3d rendering of a row of luxury townhouses along a street

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