The National Association of Realtors said existing-home sales fell 1.7% to a seasonally adjusted rate of 5.35 million, the worst level in 12 months. Total housing inventory at the end of August declined 2.1% to 1.88 million existing homes available for sale, and is now 6.5% lower than a year ago. Inventory in August was 4.2 months, down from 4.5 months in August of 2016. This is the fourth time over the past 5-months that home sales have dropped.
The tight housing supply is driving prices up to record levels, with the median existing-home price in August reaching $253,500, up 5.6%.
“Sales have been unable to break out because there are simply not enough homes for sale,” said NAR Chief Economist Lawrence Yun in a statement.
Hurricanes Harvey and Irma appear to have driven a 5.7% decline in home sales in the South. Sales in the Northeast and the Midwest rose, while those in the West fell.
Meanwhile, the hot economy is not only driving up demand for housing, but also restricting the ability of homebuilders to create new housing stock, with construction companies citing shortages in labor as well as the higher cost of land and building materials behind their inability to building enough homes to meet the pent up demand.