Home sales are predicted to continue their downward trend with a slight drop in August, according to the Residential Real Estate Nowcast from Ten-X, an online real estate transaction marketplace.
Ten-X predicts home sales in August will drop 0.1% from July to a seasonally adjusted annual rate between 5.33 million and 5.68 million with a targeted number of 5.43 million.
“Existing home sales are in a classic glass half full/glass half empty situation right now,” Ten-X Executive Vice President Rick Sharga said.
“While sales in August should be up slightly from last year, our nowcast model shows that they'll continue their downward trend and be lower than July sales,” Sharga said. “The combination of falling inventory and rising prices is proving to be a difficult hurdle for the market to overcome.”
Last month, Ten-X predicted a minor decrease in July existing home sales, giving a targeted seasonally adjusted annual rate of 5.5 million sales. Later, the National Association of Realtors released its report showing existing home sales dropped to 5.44 million in July.
Thursday, NAR released its pending home sales report, which decreased in July. The index, a forward-looking indicator based on contract signings, suggests that existing home sales will trend lower in August.
Ten-X also predicted median home prices will reverse their upward trend, falling between $245,200 and $271,011 with a targeted price point of $258,105 in August. This would mark a decrease of 0.1% from July but an increase of 7.5% from last year.
“U.S. home sales are bouncing around at an elevated level amid a number of continuing crosscurrents," Ten-X Chief Economist Peter Muoio said. “On one hand, a firm labor market is lifting demand for homes, while on the other, tight inventory levels have limited home sales growth.”
“And, although the resulting price gains continue to benefit existing homeowners, they also erode affordability, effectively sidelining potential buyers,” Muoio said. “While a couple of months of data is hardly confirmation of a trend, the recent decline in sales is worth monitoring to see if home sales are beginning to lose steam.”