September Home Sales Forecast: Sales Will Rebound, But Inventory and Hurricane Headwinds Linger
- Zillow expects existing home sales to increase 1.1 percent in September, rising to 5.41 million units at a seasonally adjusted annual rate (SAAR) after a disappointing August.
- New home sales should rise 0.1 percent from August, to 561,000 units (SAAR), near their lowest levels of the year.
Despite low interest rates, which might otherwise help boost sales, tight inventory is clearly weighing on transactions. Additionally, Hurricane Harvey posed an additional, if modest, headwind to sales nationwide in August. But in September, home sales should rebound, if only modestly.
Existing home sales have declined in each month since May. Through August, existing sales were 270,000 units below where they stood at the start of the summer at a seasonally adjusted annual rate (SAAR). In September, we expect existing homes – which the National Association of Realtors (NAR) will report October 20 – to rebound slightly to 5.41 million units (SAAR), up 1.1 percent from August’s disappointing 5.35 million sales.
Overall, we expect that Hurricane Irma – which hit Florida early in the month – to have had only a minimal effect, with damage well below early expectations. Moreover, since the storm occurred early in the month, there was ample time for a recovery to offset any delayed sales.
We expect new home sales – which the U.S. Census Bureau will report October 25 – to be roughly flat, rising 0.1 percent to 561,000 units (SAAR) in September from 560,000 in August. It would be a modest rebound from disappointing August new home sales, though still near this year’s lowest levels. New home sales consistently undershot forecasts over the summer and, given that the South is a particularly important region for new home sales, we expect that Hurricane Irma had a more significant impact on new home sales. New construction starts data for September also pointed to a sharp decline in the South.
