2017.09.2010:18:00UTC+00U.S. Existing Home Sales Slump To Lowest Level In A Year

With strained supply levels continuing to subdue overall activity, the National Association of Realtors released a report on Wednesday showing an unexpected decrease in existing home sales in the U.S. in the month of August.

NAR said existing home sales slumped by 1.7 percent to an annual rate of 5.35 million in August after tumbling by 1.3 percent to a rate of 5.44 million in July.

The continued decrease surprised economists, who had expected existing home sales to edge up to an annual rate of 5.46 million.

With the unexpected decrease, existing home sales fell to their lowest annual rate since hitting 5.34 million last August.

"Steady employment gains, slowly rising incomes and lower mortgage rates generated sustained buyer interest all summer long, but unfortunately, not more home sales," said NAR chief economist Lawrence Yun.

"What's ailing the housing market and continues to weigh on overall sales is the inadequate levels of available inventory and the upward pressure it's putting on prices in several parts of the country," he added. "Sales have been unable to break out because there are simply not enough homes for sale."

NAR said total housing inventory declined by 2.1 percent to 1.88 million existing homes available for sale at the end of August. Housing inventory is down by 6.5 percent compared to the same month a year ago.

The report also said the median existing home price in August was $253,500, down 1.8 percent from $258,100 in July but up 5.6 percent from $240,000 in August of last year.

The unexpected decrease in existing home sales came as sales in the South and West plunged by 5.7 percent and 4.8 percent, respectively.

On the other hand, NAR said existing home sales in the Northeast jumped by 10.8 percent. Existing home sales in the West also rose by 2.4 percent.

The report also said single-family home sales dropped by 2.1 percent to a rate of 4.74 million, while existing condominium and co-op sales climbed by 1.7 percent to a rate of 610,000.

Next Tuesday, the Commerce Department is scheduled to release a separate report on new home sales in the month of August.