Contracts to purchase previously owned homes fell to a seven-month low in August, held back by a tight supply in the housing market, the National Association of Realtors said Thursday.
Pending home sales fell 2.4% (the median forecast was for no change) after
The fall in contract signings was the third in four months, adding to signs that a relative paucity of available homes is holding back the market. Recent data have shown that new U.S. home construction fell more than projected in August, while home prices are rising at a solid pace. Borrowing costs remain near historic lows while jobs and wages are gaining, factors that will continue to support housing.
Outside of the Northeast, where higher inventories are giving people more options, "an increased number of prospective buyers appear to be either wavering at the steeper home prices pushed up by inventory shortages or disheartened by the competition for the minuscule number of affordable listings," Lawrence Yun, NAR's chief economist, said in a statement.
"There will be an expected seasonal decline in new listings in coming months, which could accelerate price appreciation and make finding an affordable home even more of a struggle for would-be buyers."
Pending sales declined in three of four regions, including a 5.3% drop in the West and a 3.2% decrease in the South. Purchase contracts rose 1.3% in the Northeast. NAR projects 5.36 million sales of previously owned homes in 2016, up 2.1% from 2015 and the highest in a decade.
