US Home Sales Drop More Than Expected

U.S. home resales fell more than expected in August, a cautionary sign for the U.S. housing market which has recently looked on stronger footing.

The National Association of Realtors said on Monday existing home sales dropped 4.8 percent to an annual rate of 5.31 million units.

Economists polled by Reuters had forecast a 5.51 million-unit pace of home sales last month. Sales were up 6.2 percent from a year ago.

The decline in August might be due to rising prices shutting out potential buyers, said Lawrence Yun, the NAR’s chief economist. Home sales fell most in America’s South and West, areas which had recently seen the fastest price gains, he said.

Nationwide, the median home price fell slightly in August to $228,700. That was still up 4.7 percent from a year earlier, but left the year-over-year rate at its lowest since August 2014. Prices in the West were up 7.1 percent from a year earlier.

A string of strong reports on the U.S. housing market have supported the view that the U.S. economy is building up steam and closing in on the point when the Federal Reserve will hike interest rates to keep it from overheating.

The pace of sales in July remained at an eight-year high even after being revised slightly lower on Monday.

via Reuters

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza