Americans retreated from home-buying in August, as a worsening inventory shortage appears to be hurting sales and pushing prices higher.
Housing has been a bright spot amid weak economic growth for much of this year. Sales totals continue to recover from the Great Recession. Buyers increasingly have pristine credit. But the primary weakness in housing has been a lack of properties for sale, a reflection of the lingering damage caused by the housing bubble that began to burst nearly a decade ago.
Sales of existing homes slipped 0.9 percent last month to a seasonally adjusted annual rate of 5.33 million, the second straight monthly decline, the National Association of Realtors said Thursday. The monthly setbacks happened after a period of steady gains that have lifted home sales up 3 percent so far this year. Historically low mortgage rates have combined with an improved job market to bolster demand from possible buyers.
But drastically fewer sellers are coming into the market. The number of properties for sale is dwindling despite buyer enthusiasm.
Inventory has collapsed 10.1 percent from a year ago to 2.04 million homes.
"Inventory woes continue to introduce supply gridlock for homebuyers," said Ralph McLaughlin, chief economist at the real estate firm Trulia. "Those who want to sell their home might not do so because finding another home is difficult."
The decrease has meant that demand is greater than supply, prompting prices to rise, bidding wars to erupt and many would-be buyers stuck in rentals. Those prospective homebuyers are struggling to find attractive properties in their price range and may be delaying their purchases.
The median home sales price was $240,200 in August, a 5.1 percent increase over the past year. The increase means that many Americans must save more for a down payment, which has contributed to the ownership rate slumping to a half-century low.
Sales fell in the Midwest, South and West. Only the Northeast recorded sales gains.
Rental prices are starting to become more manageable after several years of outsized growth.
The real estate firm Zillow reported Thursday that rents rose 1.7 percent over the past 12 months to a national median of $1,405 a month. A year ago, rents were climbing at a 6 percent clip.
Construction of single-family houses has increased this year, but it's done little to alleviate the supply constraints. At the current sales pace, it would take 4.3 months to exhaust the supply of 233,000 new homes on the market. The months' supply has fallen from 5.2 months a year ago, according to government reports.
Buyers are getting some help from mortgage rates that have stayed near historic lows.
Mortgage buyer Freddie Mac said the average 30-year fixed-rate mortgage stood at 3.48 percent this week, down from a 3.86 percent a year ago. The average rate has historically been closer to six percent.