Ten-X, an online real estate transaction marketplace, projected continued growth in existing home sales for May in the company’s recent Residential Real Estate Nowcast, which combines industry data, proprietary company transactional data and Google search activity to predict market trends as they are occurring.
Ten-X’s Nowcast predicts home sales for May will fall between seasonally adjusted annual rates of 5.47 and 5.83 million, with a targeted number of 5.65 million. This would be an increase of 3.7% from April, and an annual increase of 6.2%.
“Though ongoing issues with affordability and low inventory continue to hold back stronger sales growth, the recent increase in home sales is encouraging and indicative of a solid U.S. housing market supported by positive underlying fundamentals,” Ten-X Chief Economist Peter Muoio said.
“A strong labor market is adding a solid number of jobs, unemployment remains low despite a rising labor force, wage growth is starting to accelerate, lower energy prices are supporting consumer spending, and low mortgage rates are enticing for homebuyers,” Muoio said. “Despite facing some broader economic headwinds, market demand remains healthy.”
In April, the National Association of Realtors reported an year-over-year increase of 1.7% in home sales to a total of 5.45 million units.
Previously, Nowcast predicted that April existing home sales would increase by 3.6% from March and fall between seasonally adjusted rates of 5.3 and 5.7 million, with a target of 5.52 million.
Home prices are also on the rise. The NAR recently reported a 6.3% annual increase in median existing home prices to $232,500 in April. This markets the 50th consecutive month of year-over-year increases. It also falls within Ten-X’s predicted range of $218,770 to $241,798.
Now, Ten-X’s Nowcast predicts that home prices for May will fall between $226,497 and $250,339 with a targeted price of $238,418. This would be an increase of 2.5% monthly and 4.2% annually.
“Home sales are extraordinarily strong, considering how low inventory levels are and how difficult it still is for many buyers to qualify for loans,” Ten-X Executive Vice President Rick Sharga said.
In fact, according to S&P Dow Jones Indices’ Case-Shiller Home Prices Indices, home prices are now climbing at twice the rate of inflation.
“One thing worth watching over the coming months is affordability,” Sharga said. “Home price appreciation continues to outpace wage growth in many markets, and we’re seeing indications that this may be slowing down sales volume in some of the regions where home prices had been accelerating most rapidly.”