Investing.com – U.S. existing home sales unexpectedly fell in August to its second lowest pace of 2016, dampening optimism over the health of the housing market, according to a report released on Thursday by the National Association of Realtors (NAR).
The industry data showed that home resales decreased 0.9% in August to a seasonally adjusted 5.33 million units from the 5.38 million units in July. The prior month’s data was revised from an initial reading of 5.39 million units.
The consensus forecast was for a 1.1% advance to 5.45 million units.
The data helps to gauge the strength of the U.S. housing market and is considered to be a key indicator of overall economic strength.
NAR noted that the August reading was the second slowest pace of 2016, although it said that sales were still slightly higher than a year ago.
"Existing-home sales eased up in August for the second consecutive month despite mortgage rates near record lows as higher home prices and not enough inventory for sale kept some would-be buyers at bay," the report said.
“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," NAR chief economist Lawrence Yun said.
"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," he added.
The median existing-home price for all housing types in August was $240,200, up 5.1% from August 2015 ($228,500). August's price increase marks the 54th consecutive month of year-over-year gains.
"While recent data from the U.S. Census Bureau shows that household incomes rose strongly last year, home prices are still outpacing incomes in many metro areas because of the persistent shortage of new and existing homes for sale," Yun explained.
"Without more supply, the U.S. homeownership rate will remain near 50-year lows," this expert warned.
After the report, EUR/USD was trading at 1.1242 from around 1.1255 ahead of the release of the data, GBP/USD was at 1.3103 from 1.3109 earlier, while USD/JPY traded at 100.84 compared to 100.72 before the release.
The US dollar index, which tracks the greenback against a basket of six major rivals, was at 95.08, compared to 94.95 ahead of the report.
Meanwhile, U.S. stock markets were higher after the open. The Dow Jones Industrial Average gained 130 points, or 0.71%, the S&P 500 rose 13 points, or 0.58%, while the Nasdaq Composite traded up 28 points, or 0.53%.
Elsewhere, in the commodities market, gold futures traded at $1,343.35 a troy ounce, compared to $1,343.25 ahead of the data, while U.S. crude oil traded at $46.26 a barrel from $46.45 earlier.