The ongoing inventory shortage that has plagued many real estate markets over the last two years may be catching up, having an impact on sales.
According to data from the National Association of Realtors, existing home sales fell by 1.7 percent in August to a seasonally adjusted annual rate of 5.35 million.
The drop was the fourth in five months, according to NAR, and pulls the annual rate to its lowest level in a year.
NAR Chief Economist Lawrence Yun told Forbes that inventory continues to be a key driver.
“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.”
To that point the median existing home price rose to $253,000 in August, up 5. 6 percent from a year earlier. Total housing inventory declined to 1.88 million in August, 6.5 percent below the same point last year.
Svenja Gudell, chief economist at home search site Zillow, sees a soft market.
“Given the strength of the job market, favorable demographics and rock-bottom mortgage interest rates that make buying a home very affordable, the existing home sales market should be roaring instead of whimpering. All those factors that should be acting as tailwinds may all be present, but they’re being overwhelmed by the simple fact that there are just very few homes actually available to buy.”
Hurricane Harvey did make an impact, in Houston in particular, as the South’s sales fell by 5.7 percent. Sales in the Northeast and the Midwest rose, while those in the West fell.
It is likely that a majority of the lost activity from the hurricanes that struck Texas, Louisiana and Florida will show up next year.