Sales of previously occupied U.S. homes fell in August to the slowest annual pace in nearly a year despite easing mortgage rates and an increase in available homes.
Existing home sales fell 2.5% last month, with a seasonally adjusted annual rate of 3.86 million, falling short of economist expectations.
The big picture: The national median sales price increased by 3.1% from a year earlier to $416,700, marking the highest median price for the month of August on record.
- The Federal Reserve cut its main interest rate for the first time in more than four years, signaling further cuts, which should lead to lower borrowing costs on mortgages.
- Although mortgage rates have been easing since July, home sales likely declined as potential buyers waited for further rate cuts.
Driving the news: Economists project that the average rate on a 30-year mortgage will remain above 6% this year.
- There were about 1.35 million unsold homes at the end of August, representing a 22.7% increase from the previous year, providing home shoppers with a wider selection.
- However, elevated mortgage rates, high home prices, and a shortage of homes on the market have made homeownership out of reach for many Americans.
- Despite the increase in inventory, first-time homebuyers continue to face challenges in entering the housing market, accounting for a low percentage of home sales.
