WASHINGTON — The nation’s housing market is suffering from a serious inventory squeeze, and existing home sales are slowing as a result.
The National Association of Realtors says closed sales of houses and condos nationwide fell 3.2 percent from the previous month and, for the first time since November 2015, existing sales posted a year-over-year decline, down 1.6 percent.
“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 NAR chief economist Lawrence Yun.
“Realtors are reporting diminished buyer traffic because of the scare number of affordable homes on the market, and the lack of supply is stifling efforts of many prospective buyers attempting to purchase while mortgage rates hover at historical lows.”
It is particularly tight in the condo market, with new condominium construction flat, and making up only a small fraction of multi-family construction.
The lack of existing homes on the market is benefiting the new home market. The Commerce Department Tuesday reported constricts signed to buy a new home rose to the highest level in nearly nine years in July.
But new home sales still make up only about 10 percent of all residential real estate transactions, and even if builders significantly increase the pace of construction, it will not be enough to offset the low existing home inventory.
The lack of inventory is particularly evident in the Washington market.
Long & Foster says closed sales in July in Arlington County were down 13 percent from a year ago. Sales were down 10 percent in the District.
