Pending home sales fell in August, according to the National Association of Realtors, and Hurricane Harvey and Irma are expected to put existing sales below 2016’s pace. This marks the fifth time in the past six months that pending home sales have fallen.
The Pending Home Sales Index dropped 2.6 percent, from 109.1 in July to 106.3 in August. It is also 2.6 percent below August 2016 and sits at its lowest point since January 2016’s Index of 106.1.
“August was another month of declining contract activity because of the one-two punch of limited listings and home prices rising far above incomes,” Lawrence Yun, NAR chief economist, said. “Demand continues to overwhelm supply in most of the country, and as a result, many would-be buyers from earlier in the year are still in the market for a home, while others have perhaps decided to temporarily postpone their search.”
Additionally, Yun believes that the housing market has stalled due to low inventory across the country, which have been exacerbated by damage across the South due to Hurricane Harvey and Hurricane Irma.
After a strong start to 2017, existing-home sales are now forecasted to end around 5.44 million, slightly below 2016’s 5.45 million. With rising home prices across the country, the median existing-home price is estimated to increase around 6 percent over 2016.
“The supply and affordability headwinds would have likely held sales growth just a tad above last year, but coupled with the temporary effects from Hurricanes Harvey and Irma, sales in 2017 now appear will fall slightly below last year,” said Yun. “The good news is that nearly all of the missed closings for the remainder of the year will likely show up in 2018, with existing sales forecast to rise 6.9 percent.”