Summit Valuations, LLC, released its latest Residential Real Estate Market Overview, which looks at indicators that hint at future home prices
“Predicting future residential home values is very difficult, especially given the many differences we see between regions,” Summit Valuations Chief Officer Mark Melikian said in a news release. “However, the data we’re seeing, when trended over the past few months, indicate that we will likely see a drop in the number of homes sold over the next month or two and a continued decrease in housing affordability in many markets.”
In May, the month’s supply of housing, the pending home sales index, the federal unemployment rate and mortgage rates all decreased year-over-year. The median sales price and the seasonally adjusted annual number of homes sold both increased during the month, according to the data. This data suggests a decrease in the number of homes sold over the next 30 to 60 days, according to Melikian.
On a regional level, the South had the highest number of existing home sales and the West had the highest median price. The West experienced the largest percentage increase in the number of seasonally adjusted existing home sales, while the Midwest had the largest percentage gain in median sales price, month over month.
“Long term, home prices in the residential real estate market continue to be driven by tight inventory, investor activity and interest rate,” Melikian said. “An increase in inventory or interest rates, or a reduction in investor activity could lead to an eventual decline in prices. Affordability concerns, which were addressed in the February 2016 report, also impact home prices in areas where it now takes a larger percentage of personal income to afford a house. As a result, these markets could see home prices leveling in the near future.”