U.S. home sales dropped in August as supply remained short and prices rose further, the latest signal that the loss of the momentum in the housing market persisted through the third quarter.
Source: National Association of Realtors
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Existing homes fell 2.0% to a seasonally adjusted annual rate of 5.88 million units last month. Sales dropped in all four regions.
Home resales, which dominate the bulk of U.S. home sales, declined 1.5% on a year-on-year basis.
The housing market improved early in the COVID-19 pandemic amid a mass exit from cities as people worked from home and took classes online, which bolstered demand for bigger homes in the suburbs and other low-density areas.
The surge, which was skewed towards the single-family housing market unit, further surpassed supply.
The median existing house prices rose 14.9% from a year ago to $356,700 in August. But the rate of increase is slowing, and bidding wars are subsiding. Sales remain concentrated in the upper price end of the market.
Economists do not believe another housing bubble is developing as the acceleration is being mostly backed by a mismatch between supply and demand rather than poor lending practices.