By Josh Mitchell 
 

WASHINGTON--Sales of previously owned homes fell in August to the lowest level in a year, reflecting a shortage of homes on the market and a slowdown in the Houston area because of Hurricane Harvey.

Existing-home sales fell 1.7% from a month earlier to a seasonally adjusted annual rate of 5.35 million, the National Association of Realtors said Wednesday. Economists surveyed by The Wall Street Journal expected a rate of 5.45 million sales in August.

Sales have risen just 0.2% over the past year.

A sharp drop in home sales in Houston, which was racked by Hurricane Harvey last month, accounted for most of the overall decline in home sales, NAR economist Lawrence Yun said. He estimated overall sales would have been flat from the prior month without the hurricane effects.

But Mr. Yun said broader factors are weighing on the market. Inventory remains tight--in part because of lackluster home construction--and that has contributed to a run-up in home prices, pricing out potential buyers. The median price of homes sold last month reached $253,500 in August, up 5.6% from a year earlier. That's more than double the growth in Americans' incomes.

At the current sales pace, it would take 4.2 months to exhaust the supply of homes on the market. That's down from 4.5 months a year ago.

Mr. Yun projected that sales for all of 2017 will fall compared to 2016, largely because of hurricanes Harvey and Irma, which have slowed home sales in the south. But he said he expects sales to rise in 2018 as those markets rebound.

Write to Josh Mitchell at joshua.mitchell@wsj.com and Sharon Nunn at sharon.nunn@wsj.com.

(END) Dow Jones Newswires

September 20, 2017 10:15 ET (14:15 GMT)

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