The red hot housing market appears to be something of the past, according to recent home sale figures.
The National Association of Realtor’s (NAR) Pending Home Sales Index, a forward-looking indicator based on contract signings, decreased 2.6 percent in October from September’s figure. On a year-over-year basis, contract signings dropped by 6.7 percent, making October the tenth straight month of annual decreases.
All four major regions saw a decline when compared to a year ago, with the West seeing the most pronounced drop.
The NAR said it now expects sales of existing homes to decline 3.1% in 2018, and another 0.4% in 2019. The group also forecasts home prices will fall 2.5% next year.
Meanwhile, RE/MAX issued its own National Housing Report for November 2018, also pointing to the development of a new cycle: Weaker demand and rising supply (i.e. greater downward pressure on prices).
Across the 53 metro areas surveyed, inventory rose 3.0% – the highest monthly year-over-yeargain in the 10-year history of the report, following October’s 1.0% increase that ended a streak of 119 months of year-over-year declines dating back to November 2008. The Months Supply of Inventory rose to 3.9, the highest for any month since 4.2 in December 2016.November home sales, meanwhile, declined 6.9%, which was the second-largest year-over-year decline of 2018 and the biggest year-over-year sales decline for November in five years. Thus far in 2018, only April and July sales exceeded 2017 totals for the corresponding months.