Sales of previously owned U.S. homes unexpectedly fell for the second straight month in August, due to a shortage of inventory that boosts home prices.
Existing home sales fell 0.9 percent from a month earlier to an annual rate of 5.33 million units, the National Association of Realtors said Thursday. The Wall Street economists had projected home sales would rise 1.1 percent to a 5.45 million-unit pace. July's sales pace was also revised lower to 5.38 million units from the previously reported 5.39 million units.
The NAR’s chief economist, Lawrence Yun, said that the drop was due to a shortage of available properties for sale. Inventory of available properties fell 10.1 percent from a year earlier to 2.04 million, the fewest homes since March
The slowdown “is somewhat surprising given the broader economy is creating jobs,” Lawrence Yun, chief economist at the Realtors group in Washington, told reporters as the figures were released. “Inventories is the key factor that is missing in this housing market recovery.”
The shortage of inventory also boosted home prices. Median price of an existing home increased 5.1 percent from August 2015 to $240,200.
“Given the inventory shortage in most markets, new listings at affordable prices are receiving multiple offers and going under contract almost immediately,” NAR president Tom Salomone, a broker-owner of Real Estate II Inc. in Coral Springs, Florida, said in a statement.