With both home prices and mortgage rates continuing to rise, fewer consumers signed contracts to buy existing homes in August.
So-called pending home sales fell 1.8 percent for the month, according to the National Association of Realtors' seasonally adjusted index. Sales were down 2.3 percent compared with August 2017. That was the fourth monthly decline in the past five months and the slowest sales pace since January.
Sales have been hampered all year by a very lean supply of affordable listings. Inventories did rise slightly in August, but there is still precious little supply at the entry level, where most of the demand is.
"The greatest decline occurred in the West region where prices have shot up significantly, which clearly indicates that affordability is hindering buyers and those affordability issues come from lack of inventory, particularly in moderate price points," said Lawrence Yun, chief economist at the NAR.
Pending home sales dropped 5.9 percent in the West month to month and were down a striking 11.3 percent compared with August 2017. Prices in the West, however, are still higher than a year ago, but the gains are shrinking. Prices usually lag sales.
Sales fell 1.3 percent in the Northeast monthly and were down 1.6 percent annually. In the Midwest, sales fell 0.5 percent monthly and 1.1 percent annually. In the South, sales were down 0.7 percent monthly but were 1.3 percent higher than a year ago.