Existing-home sales for the month of April will reach an annual rate of between 5.15 million and 5.47 million, with a targeted number of 5.31 million – an increase of 2.3% compared to March and an increase of 11.8% compared to April 2014 – according to Auction.com's Real Estate Nowcast.
Rick Sharga, executive vice president of Auction.com, says pent-up demand from the slow season during January and February will likely boost sales in April.
‘Consumer psychology is likely also at play here,’ Sharga says in a release. ‘With talk of the Fed hiking interest rates as early as June, buyers who've been sitting on the sidelines may have decided to buy now and lock in today's historically low interest rates.’
Sharga notes that although the increase will be welcome news to the housing market, it's important to keep it in context.
‘In a truly healthy housing market, we'd be on pace for six million existing-home sales,’ he says. ‘All March did was get us more or less back into the five million range, where we'll probably remain for the next year.’
The firm predicts the average price for a home in the U.S. will run between $201,052 and $222,215 during the month of April, with a targeted price of $211,633 – a year-over-year increase of about 5%.
‘Despite some wobbles in recent macroeconomic indicators, we've seen indications of an improved U.S. labor market, suggesting a firmer foundation for growth,’ says Peter Muoio, chief economist for Auction.com, in a release. ‘These indicators include not only headline employment growth and unemployment rates, but also the pace of voluntary quits, the stabilization of labor force participation and even some nascent signs of stirring wage growth.
‘The improved labor market is an essential underlying footing for healthy home sales, and March's results – and more broadly, the green shoots of housing sales and price strength – appear to bear this out,’ Muoio adds.
Meanwhile, the National Association of Realtors (NAR) reports that existing-home sales reached a seasonally adjusted annual rate of 5.19 million in March – an increase of 6.1% compared to an annual rate of 4.89 million in February. It was the highest annual rate since September 2013 and the largest monthly increase since December 2010. What's more, existing-home sales were up 10.4% compared to March 2014, NAR says.