Sales of existing homes fell for the fourth time in five months in August, as the supply of houses on the market continues to flag and prices rose for the 66th consecutive month.
Sales data from the National Association of Realtors shows sales of existing single-family houses, townhomes and condos was down 1.7 percent from July, to a seasonally adjusted annual rate of 5.35 million, below what economists had expected.
The median price, meanwhile, rose to $253,000, up 5.6 percent from August 2016.
The latest figures underscore a shortage of housing inventory that's dampened the market even as all indicators point toward a healthy economy.
"Steady employment gains, slowly rising incomes and lower mortgage rates generated sustained buyer interest all summer long, but unfortunately, not more home sales," said Lawrence Yun, the NAR's chief economist. "Sales have been unable to break out because there are simply not enough homes for sale."
The number of existing homes for sale in August was 1.88 million, down 6.5 percent from a year ago and the 27th consecutive month of year-over-year declines. Meanwhile, with just a four-and-a-half-month supply of houses for sale -- a six-month supply is considered ideal -- competition is fierce. More than half of homes sold on August were on the market for less than a month.
Svenja Gudell, chief economist at the research site Zillow, said the sales market has reached a plateau that's hurting first-time and middle-income buyers the most.
"This flattening out of the market isn’t helped by the fact that roughly half of what is available to buy is in the highest third of the market, which is great for those well-heeled enough to shop in that price segment," Gudell said. "But for sales volumes to really break out, more supply needs to be made available for the large majority of buyers shopping in the bottom two-thirds of the market."
The latest data from Freddie Mac offers, at best, a mixed prognosis for 2018.
Inventory of existing homes will continue to be tight in next year, said the mortgage giant, while the chief driver of sales will be newly constructed homes, which can cost 15-20 percent more on average than an existing home.
As for prices, they will continue to rise, as well, albeit at a slower rate. Freddie Mac predicts price growth of less than 5 percent in 2018, compared to the 6.3 percent seen so far in 2017.