Despite the expected bump in August, overall home sales activity appears to be stuck on a plateau as tight inventory weighs on existing home sales and new home sales have struggled to meaningfully take off.
Home sales activity likely bounced back somewhat in August, according to Zillow’s August 2017 home sales forecast, after a disappointing July in which both existing and new home sales fell. Still, despite the expected bump in August, overall home sales activity appears to be stuck on a plateau as tight inventory weighs on existing home sales and new home sales have struggled to meaningfully take off.
Zillow expects August existing home sales, as reported by the National Association of Realtors on Sept. 20, to edge 0.6 percent higher in August from July, to 5.47 million units at a seasonally adjusted annual rate (SAAR). Even with the expected bump, sales at that level still represent the second-slowest month for existing sales in a year, only slightly ahead of July’s 5.44 million (SAAR) sales. Overall, our forecast puts existing home sales up 2.4 percent over the year.
We expect new home sales, reported by the U.S. Census Bureau on Sept. 26, to recover more sharply in August, rising 3.8 percent from July to 593,000 units (SAAR). July’s new home sales data were particularly disappointing – falling 9.4 percent from June in the initial report, compared to forecasts ranging from flat sales to a smaller monthly decline of 1.5 percent. Given the volatility in new home sales data, we would not be surprised to see July’s new home sales numbers revised upward, which would have the effect of moderating (or even eliminating) the anticipated increase in August.
Our forecasts suggest median sales prices for both existing and new homes should edge slightly lower in August from July – down 0.6 percent to $243,400 in the case of existing homes, and down 0.1 percent to $319,900 in the case of new homes. Both would remain more than 5 percent above their year-ago values.
