U.S. Existing Home Sales Decline To One-Year Low After Harvey

A drop in Houston-area home purchases after Hurricane Harvey and the lack of affordable housing overall brought August contract closings for existing homes down by 1.7 percent, according to the National Association of Realtors.

The annual rate of 5.35 million units is a one-year low for U.S sales and the 5.7-percent drop in the South, which includes Texas, was the lowest level for that region since November 2015. The inventory of available properties nationwide declined 6.5 percent compared with August 2016 to 1.88 million houses, marking the 27th consecutive year-on-year decline. The scarcity of supply helped push the median sales price up 5.6 percent to $253,500.

According to a Bloomberg report, economists expect U.S. housing sales in 2017 to be weaker than last year as sales and construction in Texas and Florida take a pause to clean up from the aftermath of hurricanes Harvey and Irma before gaining momentum later this year and into 2018.

Even before the storms, home price growth was exceeding wage gains because of lean inventory, crimping affordability for some and leaving buyers with fewer properties to choose from. At the same time, a steady job market and still-low borrowing costs remain sources of support for the housing recovery.

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