According to the National Association of Realtor’s (NAR) Existing-Home Sales report for August, total inventory dropped 1.7 percent, which is the fourth time in five months that a decline was recorded.
Seasonally adjusted, the rate dropped from 5.44 million homes in July to 5.35 million homes in August. Still, demand for homes continues to remain steady, according to Lawrence Yun, Chief Economist at NAR.
"Steady employment gains, slowly rising incomes and lower mortgage rates generated sustained buyer interest all summer long, but unfortunately, not more home sales," he 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."
Regionally, sales were up in the Northeast and Midwest, but those numbers were overshadowed by declines in the South and West regions, causing the national average to fall. Some of these drops can be attributed by the recent natural disasters surrounding southern Texas, but Yun believes that the full extent of the fallout won’t be known until well in the future.
"Some of the South region's decline in closings can be attributed to the devastation Hurricane Harvey caused to the greater Houston area. Sales will be impacted the rest of the year in Houston, as well as in the most severely affected areas in Florida from Hurricane Irma. However, nearly all of the lost activity will likely show up in 2018."
The report indicates that total housing inventory has declined 2.1 percent month-over-month, with 1.88 million homes available for sale. Year-over-year, existing home sales have dropped 6.5 percent from 2.01 million.
To read NAR’s full report, which includes regionally-based data, click here.