The current housing scenario doesn’t seem all that rosy with housing data for the July-August period showing dismal growth. Of late, the industry has been dealing with a shortage in inventory which is raising prices in several parts of the country.

Meanwhile, the devastating Harvey and Irma hurricanes created uncertainties for builders. This, along with higher labor, land and material costs has also been affecting the homebuilding industry.

Meanwhile, National Association of Realtors (NAR) has cut its 2017 forecast for existing-home sales owing to a tepid spring selling season and the impact of hurricanes. The group now expects the sale of 5.44 million homes in 2017, down 0.2% from 5.45 million in 2016 and well below 5.52 million expected earlier.

What Do the Numbers Say?

Existing home sales, which make up a larger part of all the U.S. real estate activity, fell to a one-year low in August (down 1.7%), per the latest report by NAR. This marked the fourth decline in five months, bringing down the annual rate to the lowest level in 12 months. Housing starts dropped 0.8% sequentially in August. In July, existing home sales slipped 1.3% from the previous quarter while housing starts dropped 4.8% sequentially.

t is important to note that on a year-over-year basis, housing starts were 1.4% higher in August. Single-family starts were even stronger, growing 17.1% from a year ago. Meanwhile, building permits, another economic indicator of the health of the housing sector, increased 5.7% sequentially and 8.3% year over year.

Is Declining Data a Matter of Concern?

It is important to note here that the Zacks Homebuilding Industry has managed to outperform the broader market (S&P 500) in the third quarter of 2017 despite the recent dampeners. The industry gained 6.2%, compared with the S&P 500 index’s 3.8% increase. Notably, the homebuilding industry ranks among the top 25% of all Zacks industries.

In spite of the lackluster monthly figures, the housing industry seems to be still going strong on a healthy economy, solid job market and affordable mortgage rates.