March is going to be a weak month for home sales, according to Auction.com's Real Estate Nowcast, which forecasts housing market conditions.
The firm is predicting that March home sales will run at an annual rate between 4.83 million and 5.12 million on an adjusted basis, with a target number of 4.97 million. That's up 1.9% from 4.88 million units February and up 5.8% from 4.59 million units in March 2014.
What's more, the firm predicts the median sales price for a home in March will reach $204,165, up from $202,600 in February.
Low inventory, slowing demand and rising prices will continue to hamper sales in March, Auction.com says.
‘The housing market is continuing to recover but at a slower, more incremental pace than what most people had hoped for in 2015,’ says Rick Sharga, executive vice president for Auction.com, in a release. ‘Three main problems continue to prevent more robust growth: extraordinarily limited inventory, especially at the entry level of the market; lower affordability, as home price increases have significantly outpaced wage growth; and tight credit for all but the most highly qualified borrowers. This adds up to an especially difficult ecosystem for first-time home buyers to navigate, and we continue to see less home sales to that segment of the market than what we've seen historically.’
‘Despite some recent softness in several economic indicators, the U.S. economy – especially the labor market – appears to be on solid footing,’ adds Peter Muoio, chief economist for Auction.com. ‘Unemployment is descending, voluntary quits are increasing and consumer confidence has breached the 100 index level mark, bringing it firmly back into 'normal' territory. These are all positives for future housing demand, and we continue to expect the housing recovery, now in a winter-like dormancy, to show signs of growth as the year progresses.’