Another limp month of existing home sales in August, the fourth monthly decline in five months and on the heels of a disappointing July, marks an unimpressive end to the what should have been a red-hot spring/summer selling season. While there may be some speculation the drop was driven by the effects of Hurricane Harvey, these data represent closed sales likely already in the process well before the hurricane hit, so it is likely too soon to see the effects of the storm. Given the strength of the job market, favorable demographics and rock-bottom mortgage interest rates that make buying a home very affordable, the existing home sales market should be roaring instead of whimpering. All those factors that should be acting as tailwinds may all be present, but they’re being overwhelmed by the simple fact that there are just very few homes actually available to buy. The summer slowdown means sales of existing homes are essentially plateauing when we would otherwise expect them to be growing. The last time sales activity essentially leveled off like this was in the late 1990s – in the roughly 20 years since then, the market has either been growing steadily (or very rapidly) or declining. This flattening out of the market isn’t helped by the fact that roughly half of what is available to buy is in the highest third of the market – which is great for those well-heeled enough to shop in that price segment. But for sales volumes to really break out, more supply needs to be made available for the large majority of buyers shopping in the bottom two-thirds of the market.