WASHINGTON: The tight US housing market pushed sales of existing homes down for the third month in row in June while prices hit a record high, according to industry data released on Monday (Jul 23).
The rising prices and falling sales came despite a slight uptick in supply, suggesting would-be buyers were being priced out of the market.
With a downward revision to May, the June figures suggested the housing sector could contribute only modestly to GDP growth in the second quarter, which is expected to be robust.
Sales of single-family houses, townhouses, condos and co-ops fell 0.6 per cent compared to May, to an annual rate 5.38 million units, the lowest level since January, the National Association of Realtors said in its monthly report.
This left sales 2.2 per cent below their level of a year ago, and was significantly below economists' expectations.
Lawrence Yun, NAR's chief economist, said the national market was in the grip of a "severe" housing shortage.
"What is for sale in most areas is going under contract very fast and in many cases, has multiple offers," he said in a statement.
"This dynamic is keeping home price growth elevated, pricing out would-be buyers and ultimately slowing sales."
In the 76th straight month of increases, the median home price jumped to a new all-time high of US$276,900, 5.2 per cent above compared June of last year.
But the inventory of existing homes available for sale rose 4.3 per cent to 1.95 million units. That was 0.5 per cent higher than in June 2017 - the first year-on-year increase in three years.
Properties sold quickly, typically within 26 days, down from 28 days a year ago, according to NAR.
Analysts say years of steady but slow economic growth have produced strong demand for single-family homes, with a generation of millennials at long last able to move out of their parents' homes.
But rising input costs, scarce labour and a significant share of housing stock held for rental by investors, have depressed available supplies.