U
S home sales declined more than expected in August as house prices remained high despite an increase in available homes for sale. According to the National Association of Realtors, existing home sales fell 2.5% to a seasonally adjusted annual rate of 3.86 million units.

    Economists had forecast a decline to 3.9 million units. Home resales dropped 4.2% year-over-year in August. The median existing home price rose 3.1% from last year to $416,700, the highest on record for any August.

    The Federal Reserve's interest rate cut could lead to lower mortgage rates and potentially increase supply by enticing more homeowners to sell their homes. However, this may also stimulate demand, keeping house prices elevated. Housing inventory increased 0.7% to 1.35 million units last month, a 22.7% jump from the previous year.

    At August's sales pace, it would take 4.2 months to exhaust the current inventory of existing homes, up from 3.3 months a year ago. Properties typically stayed on the market for 26 days in August compared to 20 days last year. First-time buyers accounted for 26% of sales, matching the all-time low seen in November 2021.

    The National Association of Realtors' chief economist said that lower mortgage rates and increasing inventory will provide a favorable environment for future home sales growth.