Existing home sales tumble amid low inventory, higher prices

A scarcity of affordable homes on the market helped drag down existing homes sales in July as low inventory levels and higher prices put an end to a four-month climb.  

Existing home sales fell 3.2% to a seasonally adjusted annual rate of 5.39 million from a revised 5.57 million in June, according to the National Association of Realtors. That includes transactions of single-family homes, townhomes, condominiums and co-ops.

“Severely restrained inventory and the tightening grip it’s putting on affordability is the primary culprit for the considerable sales slump throughout much of the country last month,” said Lawrence Yun, chief economist at the association.

Existing homes for sale ticked up 0.9% from a month ago to 2.13 million homes, but is still down 5.8% from a year ago. That's the 14th straight month of year-over-year decline.

Meanwhile, the median sale price showed no sign of cooling down. It climbed 5.3% to $244,100 from a year ago, the 53rd straight month of year-over-year growth.

"Realtors are reporting diminished buyer traffic because of the scarce number of affordable homes on the market," Yun said.

Transactions of single-family homes slipped 2% from last month to a seasonally adjusted annual rate of 4.82 million and is 0.8% below a year ago. Sales of multi-family houses, including condominium and co-ops, declined 12.3% to 570,000. 

The West was the only region that posted sales growth, rising 2.5% to an annual rate of 1.23 million, yet still slightly below a year ago. Existing home sales in the South, Midwest and Northeast all decreased.