A Ten-X forecast of the May housing market indicated existing home sales dropped and median sale prices climbed for the 62nd consecutive month.
Ten-X’s Residential Real Estate Nowcast predicted May sales will hit a seasonally adjusted annual rate between 5.37 million and 5.73 million with a targeted number of 5.50 million, down 1.2 percent from the National Association of Realtors’ reported April sales and down .54 percent from a year ago.
“Two consecutive months of weaker existing home sales isn’t cause for panic, but it does suggest that forecasts calling for a robust housing market may have been too optimistic,” Ten-X Executive Vice President Rick Sharga said in a release accompanying the forecast.
“It appears that the combination of extraordinarily low inventory and home price appreciation that continues to outpace wage growth is slowing down sales, especially in some of the country's higher-priced markets.”
Ten-X predicts that median existing home prices in May will settle between $237,570 and $262,577 with a target price point of $250,074, up 2.2 percent from April and a 4.3 percent gain from last year.
“Despite inventory constraints continuing to fuel price gains and curb affordability, demand is healthy and relatively low mortgage rates have enabled more buyers to enter the market,” Ten-X Chief Economist Peter Muoio said.
“While there is some uncertainty over the possibility of another rate hike and its impact on affordability, the housing market remains on solid footing supported by a firm labor market and rising wages,” Muoio added.