The housing industry saw dips in existing-home sales and housing starts in August, according to information published by the National Association of Realtors (NAR) and the U.S. Department of Commerce.
Existing-home sales decreased 1.7 percent to a seasonally adjusted annual rate of 5.35 million in August.
“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 in a press release. “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 American Bankers Association (ABA) noted on its blog that the pace of existing-home sales for August was 0.2 percent higher than what it was August of last year and the lowest since then.
Total housing inventory fell 2.1 percent to 1.88 million available homes. That is 6.5 percent lower than last August, marking the 27th straight month of year-over-year decline. The median existing home price was $255,500, representing a 5.6 percent increase from August 2016 ($237,600). This marks the 66th straight month of year-over-year gains.
Distressed sales represented 4 percent of the total number August sales. That is down from 5 percent in July and a year prior. Of those total sales, 3 percent were foreclosures and 1 percent were short sales.
Housing starts decreased to a seasonally adjusted annual rate of 1.18 million in August, according to the U.S. Department of Commerce. The ABA noted that the drop was 0.8 percent lower than the 1.19 million revised July rate and 1.4 percent lower than the rate for last August. Single-family home starts, however, grew 1.6 percent from last month.
The ABA also noted that two of the Midwest and the West regions experienced increases in housing activity, with 22 percent growth and 4 percent growth, respectively. Conversely, housing activity in the Northeast and the South declined by 8.7 percent and 7.9 percent, respectively.
New building permits increased throughout August, jumping 5.7 percent to 1.3 million. That represents the largest monthly total since January. Multifamily permits grew the most, increasing by 19.6 percent, and new building permits were issued at a rate 8.3 percent up from August 2016.
Housing completions were at a seasonally adjusted annual rate of 1.075 million, which is 10.2 percent down from the revised July estimate, however, is still 3.4 percent higher than the August 2016 rate.