Low inventory continued to vex the housing market and caused existing-home sales to drop 1.7 percent to 5.35 million in August from July, marking the fourth month of declines out of five, according to the National Association of Realtors.
Total housing inventory last month was down 2.1 percent from July to 1.88 million existing homes for sale and down 6.5 percent from a year ago. NAR reports that inventory has declined year over year for 27 consecutive months.
“Steady employment gains, slowly rising incomes and lower mortgage rates generated sustained buyer interest all summer long, but unfortunately, not more home sales,” NAR chief economist Lawrence Yun said. “What’s ailing the housing market and continues to weigh on overall sales is the inadequate levels of available inventory and the upward pressure it’s putting on prices in several parts of the country. Sales have been unable to break out because there are simply not enough homes for sale.”
The low inventory also is driving prices up. According to NAR, the median price of any type of existing home was $253,000 in August — a jump of 5.6 percent over $240,000 in August 2016.
Conditions continue to edge out first-time homebuyers who may have smaller budgets or take too long to pull the trigger in a climate when homes fly off the market often within days.
“Market conditions continue to be stressful and challenging for both prospective first-time buyers and homeowners looking to trade up,” Yun said. “The ongoing rise in home prices is straining the budgets of some of these would-be buyers, and what is available for sale is moving off the market quickly because supply remains minimal in the lower- and mid-price ranges.”