U.S. existing home sales likely to drop in October, rising inventories to weigh on prices

Existing home sales in the United States are expected to have dropped during the month of October, with further volatility expected in the upcoming near term however, risk of rising inventories will likely exert pressure on the units’ prices in the months ahead.

The U.S. October existing home sales, scheduled to be released on November 22 at 15:00GMT, rose 3.2 percent to 5.47 million during the month of September. However, larger gains are expected to be seen in the months ahead, with seasonal factors contributing to the volatility in the indicator. We expected it to fall to 5.38 million in today’s release.

In addition, the large number of existing homes s increased the supply of residential properties in the country, further deteriorating the near-term prospects of a closure of sales of the already-existing properties.

However, coupled with all factors, the supply glut as well as rising level of inventories will exert considerable pressure on the prices, helping the property market to stabilize.

Meanwhile, the dollar index is trading 0.16 percent down at 100.89, while at 5:00GMT, the FxWirePro's Hourly USD Strength Index remained neutral at 27.48 (lower than the 75 benchmark for bullish trend). For more details, visit http://www.fxwirepro.com/currencyindex