Existing home sales are projected to decline for the second consecutive month, according to an early read from housing economist Tom Lawler. His analysis, based on limited data released by local realtor/MLS reports, estimates a seasonally adjusted annual rate of sales at 4.0 million – an 8.0% drop from ‘s preliminary pace and a 2.2% decrease year-over-year.
Lawler’s projection, shared on , precedes the National Association of Realtors (NAR) official release scheduled for tomorrow. The current consensus among analysts anticipates a slightly higher sales figure of 4.25 million SAAR, a rise from ‘s 4.09 million, but still below ‘s 4.35 million. Lawler, however, believes the consensus is optimistic.
The projected decline isn’t entirely unexpected. Lawler notes that unadjusted sales are likely to show a larger year-over-year decrease, attributable to a lower number of business days in compared to the previous year. Adverse weather conditions across much of the country during the latter half of the month likely hampered closing activity.
The NAR’s report will also incorporate revised seasonal factors, a standard practice that can influence reported sales figures. These adjustments aim to account for predictable fluctuations in the housing market throughout the year, potentially “smoothing” monthly data. Lawler anticipates these seasonal adjustments won’t significantly alter the overall trend.
Despite the projected dip in sales volume, the median existing single-family home sales price appears to be holding steady. Local reports suggest a roughly 1.0% increase in price compared to . This indicates that while fewer homes are changing hands, those that are are maintaining their value.
It’s important to note that Lawler’s estimate is based on a smaller dataset than in previous years. The NAR is releasing sales data earlier in the month, resulting in fewer local reports being available for his analysis. This limited data availability introduces a degree of uncertainty into the projection.
Recent data from the NAR, released on , showed existing-home sales descending 4.9% from to a seasonally adjusted annual rate of 4.08 million in . This figure, while below the consensus forecast, represented a 2.0% improvement compared to , marking the fourth consecutive month of year-over-year gains.
That report also highlighted an increase in total housing inventory, reaching 1.18 million units – a 3.5% rise from and a substantial 16.8% increase year-over-year. This translates to a 3.5-month supply at the current sales pace, up from 3.2 months in and 3.0 months in . Increased inventory generally provides more options for buyers and can moderate price growth.
Looking back to , an earlier read on sales projected a seasonally adjusted annual rate of 4.09 million, down 3.5% from but up 2.3% from . The median existing single-family home sales price was estimated to be up approximately 5% year-over-year at that time.
Another early estimate, reported around the same period, suggested a slightly higher rate of 4.18 million, up 4.0% from but down 35.6% from . This highlights the variability in early estimates and the importance of awaiting the official NAR release.
The interplay between sales volume, inventory levels, and pricing trends will be crucial to watch in the coming months. While the year-over-year gains reported in are encouraging, the projected decline for suggests the housing market may be entering a period of moderation. The NAR’s official report, due tomorrow, will provide a more definitive picture of the current state of the market.
