Despite mortgage rates near record lows, the National Association of Realtors released a report on Thursday showing an unexpected decrease in U.S. existing home sales in the month of August.
The report said existing home sales slid 0.9 percent to an annual rate of 5.33 million in August after tumbling by 3.4 percent to a downwardly revised 5.38 million in July.
The continued decrease in existing home sales surprised economists, who had expected sales to climb to a rate of 5.44 million from the 5.39 million originally reported for the previous month.
NAR said the unexpected drop pulled existing home sales down to their second lowest pace of 2016, although sales are still up by 0.8 percent compared to 5.29 million in the same month last year.
"There's no question that after peaking in June, sales in a majority of the country have inched backwards because inventory isn't picking up to tame price growth and replace what's being quickly sold," said NAR chief economist Lawrence Yun.
He added, "Hopes of a meaningful sales breakthrough as a result of this summer's historically low mortgage rates failed to materialize because supply and affordability restrictions continue to keep too many would-be buyers on the sidelines."
The report said there were 2.04 million existing homes available for sale at the end of August, down 3.3 percent from 2.11 million at the end of July and down 10.1 percent from 2.27 million a year ago.
The unsold inventory represents 4.6 months of supply at the current sales pace compared to the 4.7 months of supply at the end of July.
NAR also said the median existing home price was $240,200 in August, down 1.3 percent from $243,400 in the previous month but up 5.1 percent year-over-year.
The report said single-family home sales declined 2.3 percent to a rate of 4.70 million, while existing condominium and co-op sales jumped 10.5 percent to a rate of 630,000.
Next Monday, the Commerce Department is scheduled to release a separate report on new home sales in the month of August.
by RTT Staff Writer
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