U.S. existing home sales likely to rebound in Sep, to remain volatile in coming months

The United States existing home sales are expected to have rebounded during the month of September and are likely to remain volatile over the coming few months.

The September existing home sales report is scheduled to be published on October 20 at 10:00EDT (14:00GMT). The NAR reported that existing home sales decreased -0.9 percent to 5.33 million in August. Alongside expectations for a modest rebound and we anticipate an increase to around 5.41 million for existing home sales, likely to see further volatility in the months ahead.

 Seasonal factors can contribute to large monthly volatility in home sales data. Alongside an expected +1.3 percent increase in existing home sales in September, broader gains are expected to be seen in the months to come. According to the NAR, improvement should be seen over the course of 2016, improving from the unstable footing that has defined the series for some time.

The large number of homes already on the market and the number of those that will appear via foreclosure over the next several months will likely weigh on prospects for existing home sales in the near-term.

Furthermore, elevated inventories should contribute some pressure on prices for existing homes (positively, there has been some stabilization in recent months). On balance, it can be largely expected that these factors will be on hold in the September numbers, leading to an overall reading of 5.50 million.