Auction.com projects that existing home sales for the month of July will fall between seasonally adjusted annual rates of 5.39 and 5.75 million annual sales with a targeted number of 5.57 million – up 1.4% from June, a more modest increase than the Auction.com “Nowcast” had previously called for.
The projected median sales price for July reflected in the company’s original nowcast released on July 22 remains unchanged at $239,126.
Online traffic patterns shifted over the latter half of July, leading to the downward revision from Auction.com’s original prediction (a range of 5.49 and 5.84 million annual sales with a targeted number of 5.67 million).
“While we believe that the housing market continues to recover from the most volatile boom and bust cycle we’ve ever seen, that recovery continues to be uneven, taking an occasional step backwards,” said Auction.com Executive Vice President Rick Sharga. “One potential cause for concern is that as home prices continue to rise – significantly outpacing wage growth – many markets are becoming too expensive for first time buyers to enter, which effectively causes the whole home buying engine to seize up.”
These patterns, Auction.com says, are similar to the recent decline in pending home sales reported on July 29 by the National Association of Realtors.
That report included a Pending Home Sales figure of 110.3 – a 1.8% month-over-month growth decline for a month of June – noting that competition for existing homes is stiff due to inventory constraints and price increases.
Sharga also expressed concern regarding the Fed’s recent announcement that it is likely to raise interest rates as early as fall.
“If mortgage rates rise by as little as a point while home prices continue to go up, the slow but steady housing recovery we’ve been watching could suddenly take a turn for the worst,” he said.