Existing U.S. Home Sales Continue Momentum in June

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Auction.com is projecting that existing U.S. home sales for the month of June 2015 will run between seasonally adjusted annual rates of 5.4 and 5.74 million annual sales, with a targeted number of 5.57 million - up 4.1 percent from May and 11.2 percent from a year ago.

"Improvements in the labor market and to wage growth should continue to increase owner occupier demand and start to make up for the recent retreat of investors from the market," said Auction.com Executive Vice President Rick Sharga. "Inventory has also increased, aiding sales flow as more first-time buyers enter the market just in time for the summer buying season."

Last week the National Association of Realtors released its existing home sales data for May, reporting that home sales were at 5.35 million units - a 5.1 percent increase from April's sales and up 9.2 percent from a year ago. These sharp increases were in line with Auction.com's May nowcast point estimate of 5.31 million (revised upward from 5.18 million) - a prediction that beat the consensus estimate of 5.25 million. The NAR also revised upward the unusually weak initial April report to 5.09 million from its original estimate of 5.01, indicating that Auction.com's nowcast for April was closer to target than it originally appeared.

NAR also reported a May increase in existing home prices to $228,700 - their highest level since April 2007. This was well within the range of $209,759 and $231,839 that Auction.com predicted last month and indicates a 4.2 percent increase compared to a year ago. Findings from Auction.com suggest that sales prices for existing homes will fall between $217,482 and $240,375 during the month of June, with a targeted price of $228,929. This represents a 3.1 percent year-over-year increase for the month.

"It certainly appears that the housing market is now on firmer ground, and Google search data and Auction.com data are both signaling further strengthening this month," said Auction.com Chief Economist Peter Muoio. "Housing turnover is increasing, prices are strengthening and additional sellers are tip-toeing into the market.  As long as the labor market continues to gain steam and confidence is not derailed, housing sales and prices could settle into a virtuous, self-reinforcing cycle."