Product Shortage Blunts Existing-Home Sales

“The underproduction of single-family homes over the last decade has played a predominant role in the current inventory crisis that is weighing on affordability,” says Yun.

WASHINGTON, DC—An uptick in housing starts last month couldn’t do much to stem the biggest annual decline in existing-home sales in more than three years. The National Association of Realtors’ Lawrence Yun attributed the decline in part to a shortage of inventory putting upward pressure on pricing, including that of for-sale apartments.

“The utter lack of sufficient housing supply and its influence on higher home prices muted overall sales activity in much of the US last month,” says Yun, chief economist with NAR. “While the good news is that realtors in most areas are saying buyer traffic is even stronger than the beginning of last year, sales failed to follow course and far lagged last January’s pace. It’s very clear that too many markets right now are becoming less affordable and desperately need more new listings to calm the speedy price growth.”