Takeaways:
- Auction.com has revised its July existing-home sales projections and now expects roughly 5.57 million annual home transactions.
- The revision represents a 1.4 percent increase from June — a more modest increase than initially forecasted.
- It also represents a decline of 100,000 sales in comparison to the initial July forecast of 5.67 million.
Auction.com has revised its July existing-home sales projections and now expects roughly 5.57 million annual home transactions.
The revision represents a 1.4 percent increase from June — a more modest increase than initially forecasted by Auction.com’s Real Estate Nowcast. It also represents a decline of 100,000 sales in comparison to the initial July forecast 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 Rick Sharga, EVP at Auction.com.
The downward revision is attributed to a shift in online traffic patterns during the latter half of July. This revision is consistent with recent findings from the National Association of Realtors, which also showed a decline in pending home sales.
Auction.com noted that competition for existing homes is stiff due to inventory constraints and price increases. The firm’s projected median sales price for July is $239,126.
“One potential cause for concern is that as home prices continue to rise — significantly outpacing wage growth,” Sharga said, “many markets are becoming too expensive for first-time buyers to enter, which effectively causes the whole homebuying engine to seize up.”
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 worse,” he cautioned.