By Lucia Mutikani
WASHINGTON (Reuters) – U.S. home resales fell to their lowest in a year in August as Hurricane Harvey depressed activity in Houston and a perennial shortage of properties on the market sidelined buyers.
The National Association of Realtors said on Wednesday
existing home sales decreased 1.7 percent to a seasonally
adjusted annual rate of 5.35 million units last month. That was the lowest level since August 2016.
July’s sales pace was unrevised at 5.44 million units. Economists had forecast sales rising 0.3 percent to a 5.46
The NAR said Harvey, which struck Texas in the last week of August, had resulted in sales in Houston declining 25 percent on a year-on-year basis. Stripping out Houston, existing home sales would have been unchanged in August.
Home resales in the South tumbled 5.7 percent last month.
Harvey, and a second hurricane, Irma, which slammed Florida early this month could hurt September home resales. Texas and Florida account for more than 18 percent of existing home sales. Sales lost because of delays in closing contracts will be recouped in 2018, the Realtors group said.
U.S. financial markets were little moved by the data as traders awaited the conclusion of the Federal Reserve’s two-day policy meeting later on Wednesday.
The U.S. central bank is expected to announce a plan to start shrinking its $4.2 trillion portfolio of Treasury bonds and mortgage-backed securities, accumulated as the Fed sought to stimulate the economy following the 2008 financial crisis.
Even before the hurricanes struck, the housing market had been slowing as supply failed to keep up with strong demand.
Sales were up 0.2 percent from August 2016. Home sales have virtually stalled this year amid tight inventories that have resulted in home price increases outpacing wage gains.
Builders have blamed shortages of labor and land for their inability to ramp up construction. They have also complained about higher costs of building materials.
Economists and builders say Harvey and Irma could worsen the housing shortage as scarce labor is pulled toward the rebuilding effort and building materials are bid higher.
A report on Tuesday showed housing completions tumbling to a 10-month low in August. At the same time single-family home permits fell to a three-month low. These developments suggest housing inventory will remain troublesome for a while.
The NAR said the number of homes on the market fell 2.1 percent to 1.88 million units in…