A gauge of future U.S. home sales fell in August to its lowest reading in more than a year, as low supply levels and recent hurricanes continue to hinder home closings.
The National Association of Realtors on Wednesday said its pending home sales index, which tracks contract signings for previously owned homes, declined 2.6% from July to 106.3 in August. Economists surveyed by The Wall Street Journal had expected a smaller decrease of 0.5% from July.
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The index was down 2.6% in August from a year earlier.
Lawrence Yun, NAR chief economist, said the limited number of homes for sale and rising price tags have continued to plague the housing market, draining the momentum gained in the past year.
"Demand continues to overwhelm supply in most of the country, and as a result, many would-be buyers from earlier in the year are still in the market for a home, while others have perhaps decided to temporarily postpone their search," he said.
Hurricane Harvey, which hit Texas and Louisiana in late August, dragged down signings for previously-owned homes in the South. Mr. Yun said Hurricane Irma, which hit Florida in early September, will likely further slow sales in the South's housing market region.
The impact of limited inventory and the subsequent surge in housing prices that has scared away many would-be homebuyers is showing up in other housing-market data.
Sales of previously owned homes fell in August to the lowest level in a year, declining 1.7% from a month earlier. Purchases of newly built single-family homes fell 3.4% in August from the previous month, the second straight monthly decline, hitting their lowest level since December.
Mortgage rates remain low after moving lower since early 2017, but they are still up compared with last summer. The average interest rate on a 30-year fixed-rate mortgage was 3.88%, down from 3.97% in July and up from 3.44% in August 2016, according to Freddie Mac.
News Corp, owner of The Wall Street Journal, also operates Realtor.com under license from the National Association of Realtors.
Write to Sharon Nunn at Sharon.Nunn@wsj.com
(END) Dow Jones Newswires
September 27, 2017 10:15 ET (14:15 GMT)