Sales of previously-owned U.S. homes fell in December for the first time in four months, as the market struggles with record-low supply and rising prices, figures from the National Association of Realtors showed Wednesday.

Highlights of Existing-Home Sales (December)

Contract closings declined 3.6% m/m to a 5.57m annual rate (est. 5.7m) after 5.81m Median sales  price increased 5.8% y/y to $246,800 Inventory of available properties fell 10.3% y/y to 1.48m, a record low in data going back to 1999 2017 sales of 5.51m were up 1.1% from 2016, smallest gain in three years

Key Takeaways

The decline, deeper than economists estimated, indicates inventory issues across the U.S. are limiting Americans’ ability to purchase despite low mortgage rates and a solid job market. Higher prices spell lower affordability, particularly for first-time buyers: The median selling price rose 5.8% in 2017, easily outpacing wage gains. Government data show the number of building permits last year was the highest in a decade, indicating a pipeline of new properties that could help alleviate the supply crunch.

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