Despite low inventories continuing to dog the housing market, forecasts from Zillow suggest that market conditions may have eased slightly from March.
Zillow projects existing home sales to increase 0.35 percent at a seasonably adjusted rate in April from the March total of 5.33 million units. Additionally, new home sales are also expected to rise 1.85 percent to 520,000 units. If both of these forecasts hold true, it would mark the first time new and existing home sales have increased compared to the previous month since December. Year-over-year home sales are also expected to show a significant increase of 1.9 percent for existing homes sales and 7.3 percent for new home sales between April 2015 and April 2016.
Both new and existing home sales have been hindered throughout the first quarter of 2016 by incredibly tight inventory. Year-over-year, inventories were down 1.5 percent in March 2016 compared to march 2015. Single-family homes took the brunt of the hit from low inventory: Inventories were down 8 percent year-over-year. Condos and co-ops were down 0.6 percent year-over-year.
There are some good signs, however, as single-family permits were up 8.4 percent from April 2015. In addition, single-family starts were up 4.3 percent and the number of single-family homes under construction increased 18 percent. While this new construction has not yet added to increased inventory or new home sales, April should see new construction begin to leave its mark on the market.
Due to the increases in new construction, Zillow now expects there to be a relatively strong increase in new home sales this summer.
For the full analysis and to view accompanying graphs, follow the link below.