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LOS ANGELES (AP) — Sales of previously occupied U.S. homes fell for the third month in a row in August, as higher mortgage rates, rising prices and a dearth of properties on the market discouraged many would-be homebuyers.
Existing home sales fell 0.7% last month from July to a seasonally adjusted annual rate of 4.04 million, the National Association of Realtors said Thursday. That’s below the 4.10 million pace that economists were expecting, according to FactSet.
Sales slumped 15.3% compared with the same month last year.
The national median sales price rose 3.9% from August last year to $407,100, marking the third month in a row that the median price remained above $400,000.
“Home prices continue to march higher despite lower home sales,” said Lawrence Yun, the NAR’s chief economist. “Supply needs to essentially double to moderate home price gains.”
The shortage of homes for sale has kept the market competitive, driving bidding wars in many places, especially for the most affordable homes. About 31% of homes purchased last month sold for more than their list price, Yun said.
All told, there were 1.1 million homes on the market by the end of last month, down 0.9% from July and 14.1% from August last year, the NAR said.
The latest housing market figures are more evidence that many house hunters are being held back by a persistently low inventory of homes for sale and rising mortgage rates.
Because home sales typically take about a month to be finalized once a contract is signed, transactions in August happened as the rate for a 30-year mortgage averaged just under 7%.
The weekly average rate on a 30-year home loan climbed jumped hit 7.23% last month, the highest level in more than 22 years, and has held above 7% since August, according to mortgage buyer Freddie Mac.
High rates can add hundreds of dollars a month in costs for borrowers, limiting how much they can afford in a market already unaffordable to many Americans. They also discourage homeowners who locked in those low rates two years ago from selling.