Pending home sales in August sank to their lowest levelsince January, according to the National Association of Realtors Pending HomeSales Index.
The index declined 2.4% to 108.5 in August from 111.2 inJuly, and fell 0.2% from the previous year, bringing the index to itssecond-lowest reading this year.
National Association of Realtors chief economist LawrenceYun said in a release that declining supply levels may have taken the wind outof the housing market's sails, noting that "an increased number ofprospective buyers appear to be either wavering at the steeper home pricespushed up by inventory shortages, or disheartened by the competition for theminiscule number of affordable listings."
Higher inventory totals in the Northeast are givinghomebuyers more options, accounting for the region's 1.3% growth in pendinghome sales to 98.1 in August, 5.9% higher than the previous year, Yun said.
In the Midwest, the Pending Home Sales Index decreased 0.9% monthover month to 104.7 in August, down 1.7% year over year. In the South, theindex declined 3.2% from July, to 119.8, down 1.5% from August 2015. The Westsaw a 5.3% fall in August to 102.8, 0.6% lower than a year ago.
According to Yun, the current housing recovery could stallwithout more new home construction. Housing inventory has declined year over yearfor 15 months in a row, while housing prices have risen every year for the pastfour or so years.
NAR expects that existing home sales in 2016 will rise 2.1%from 2015, at the highest annual pace since 2006, while national medianexisting-home price growth should rise around 4%.