US December home sales fall as record-low supply lifts prices

Washington

US home sales fell more than expected in December as the supply of houses on the market dropped to a record low, pushing up prices and sidelining some potential first-time buyers.

The decline in home sales reported by the National Association of Realtors on Wednesday followed three straight months of strong increases. Inventory constraints dogged the housing market last year against the backdrop of robust demand, largely driven by a labour market that is near full employment.

Economists expect supply to remain tight this year, which together with rising mortgage rates could result in modest home sales growth in 2018.

"We expect little growth in sales in 2018, given tight inventories," said Gregory Daco, chief US economist at Oxford Economics in New York. "Affordability will be crimpe…