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.
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Sales fell 0.9% to a seasonally-adjusted annual rate of 5.33m from a downwardly revised 5.38m in July and missing expectations for a 1.1% increase.
Sales of previously owned homes fell for a second month in August as inventory of homes for sale continued to shrink.
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 past year. The unemployment rate has hovered around 5 percent since August past year and a tightening labor market has begun to push up wages, although not enough to keep up with home price growth.
“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.
Only the Northeast saw more sales in part, the NAR said, due to greater supply compared to the West, South and Midwest. First-timers represent fresh demand in the market, but they’ve struggled to gain a foothold as prices remain high, credit stays tight, and investors crowd in.
Earlier this week data showed USA housing starts fell more than expected in August but that was likely due to bad weather disrupting building activity in the South.
The number of homes on the market has plunged 10.1 percent from a year ago to 2.04 million.
The median sales price was $240,000, which is 5.1% higher than in August 2015.
The amount of time it would take to clear current supply is about 4.6 months at the sales pace seen last month.
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